Oil prices have dropped by 60 percent since July. And they fell without the benefit of a gasoline tax holiday, new anti-speculator regulations, or a windfall profits tax on oil companies. A year ago, crude oil was going for $88.00 per barrel and gasoline cost an average of $2.76 per gallon. Over the following months, the price soared, reaching an inflation-adjusted record high of just over $147 per barrel in July. Then the bottom fell out. Yesterday, the price was hovering around $58, up from a recent low of $53 per barrel. The result is gasoline prices plummeting from a national average of $4.11 per gallon in July to below $2.07 per gallon now. So what happened?

First, just as one would expect, higher prices led to lower demand. U.S. demand for petroleum in 2008 was 5.4 percent lower than in 2007, falling by 1.1 million barrels per day (bpd) from 20.7 million to 19.6 million barrels per day. As prices rose Americans curtailed their driving. The Federal Highway Administration reported that in August 2008, Americans drove 15 billion fewer miles, or 5.6 percent less, than they did in August 2007. On the other hand, recent high prices have called forth new sources of supply. For example, Canadian oil sands now produce 1.1 million barrels per day. And new deepwater offshore production rigs like the Thunder Horse (250,000 barrels per day) and Tahiti (125,000 barrels per day) platforms are coming online. Falling demand and increasing supply mean lower prices.

In addition, a good portion of the lower demand for oil is the result of the global economic slowdown. "This time the usual petroleum boom/bust cycle lined up on top of the business cycle," said Tim Evans, an energy futures analyst at Citigroup's Futures Perspective. In March 2008, Evans warned that we were in the midst of a bubble and that oil prices would drop. When the investment firm Goldman Sachs suggested the possibility of $200 per barrel oil, Evans predicted that prices would fall to $60 to $70 per barrel. He observed presciently that "this is the riskiest time to be long in crude oil since 1980."

So as prices drop will demand increase? Yes, but Evans believes that U.S. demand will rise slowly. Why? In part because various federal government policy responses to recent high oil prices are unlikely to be reversed. For example, the Federal government has mandated that Corporate Average Fuel Economy standards for automobiles rise from 27.5 miles per gallon now to 35 miles per gallon by 2020. Evans thinks that hybrid automobile technology may look economically attractive even at current prices. Plug-in hybrids like the Chevy Volt should use about 2 cents of electricity per mile compared to 12 cents per mile of gasoline. In addition, Evans says, "The biofuels initiatives aren't going to go away. Even if they are not economically smart, the votes are there to make sure that we stick with these programs." So subsidized biofuels will displace some demand for gasoline, putting downward pressure on the price of crude oil.

On the supply side, those "windfall profits" that oil companies have been earning in the last couple of years are paying for exploration and development of more oil supplies. It is true that the oil companies have been using their record profits to buy back stock and thus increase shareholder value. Some members of Congress believe that the oil companies should spend their profits on alternative energy projects that the companies don't believe can be justified economically. And if the oil companies don't stop enriching their shareholders, Congress will see to it that the "windfall profits" are taxed away and spent by government bureaucrats on alternative energy projects. It is possible that the members of Congress know better how to spend oil company profits than do their executives, but the Federal government's record in this area is not impressive.

Naturally, suppliers don't like lower prices, so the members in the Organization of Petroleum Exporting Countries (OPEC) want to drive up prices by restricting supply. In October, OPEC members pledged to cut oil production by 1.5 million barrels per day beginning on November 1. They plan to hold another meeting later this month to discuss further reductions. Even as consumers enjoy lower prices at the gas pump now, analysts at the International Energy Agency fret that they will lead to underinvestment in oil production capacity, resulting in a crude oil supply crunch by the middle of the next decade. Disturbingly, 80 percent of the world's known oil reserves are owned by government oil companies whose revenues are looted rather than reinvested in production. In any case, lower prices and the credit crunch are already causing oil companies to shelve some projects. Alternative energy promoters also fear lower petroleum prices because they make their projects even less economically feasible. Some are advocating a higher gasoline tax in order to counteract the deleterious effects of lower crude oil prices on the glorious alternative energy future.

So what's next for oil prices? For the coming year, Evans thinks that the price of oil will bounce around in a trading range of $50 to $90 per barrel, averaging around $70 per barrel.

Ronald Bailey is reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

This one could be filed a lot of places. The original contains a lot of links to source material:

When Does an Infant Industry Stop Needing Its Taxpayer Allowance?

Federal bioethanol subsidies are 30 years old this month. As reason has documented time after time after time after time, those subsidies to corn ethanol have had deleterious effects on the environment and the price of food around world.

It's way past time for the industry to stand or fall on its own economic merits. Food Before Fuel, a broad coalition of environmental, farming, taxpayer, consumer and other groups, is calling on the feds to drop counterproductive bioethanol subsidies:

“On many issues, these groups gathered here today do not see eye to eye. But we have come together because we all can agree that the government’s subsidization of the corn ethanol industry is a flawed policy that pits rural industries against one another, raises food prices for everyone and has failed to yield promised environmental benefits,” Brandenberger said.

Duane Parde, president of the National Taxpayers Union, was critical of the ethanol industry as a “demonstrative waste of taxpayer money in a time of economic hardship.”

"President-elect Obama and the 111th Congress have an opportunity to protect taxpayers and end business as usual,” Parde said. “We have spent 30 years and billions of taxpayer dollars subsidizing the production of ethanol with little to show for it. Despite the subsidies, ethanol is not competitive in the marketplace and the industry only survives because politicians shovel our money into their pockets. We must end the bailouts and subsidies for industries that are unable or unwilling to stand on their own."

Craig Cox, Midwest vice president of the Environmental Working Group, said that, "After 30 years of subsidies, ethanol is displacing only 3 percent of the gasoline we use each year, is likely increasing rather than decreasing greenhouse gas emissions, and is threatening our soil, water and wildlife. Yet ethanol gets $3 out of every $4 of tax credits the federal government gives to all renewable alternatives including wind, solar and geothermal. It is time we direct our tax dollars to renewable alternatives, including biofuels, based on how well they protect our climate, our environment and our energy security."

Jason Clay, senior vice president for market transformation at the World Wildlife Fund, noted, “In its work with local communities and habitats across the globe, the World Wildlife Fund has seen the negative impacts of the biofuel policy not only on the environment, but on vulnerable populations throughout the world.”

As Competitive Enterprise Institute senior fellow Marlo Lewis notes:

"After 30 years of government coddling, it's time for this infant industry to grow up and succeed or fail on its own merits. If ethanol is commercially viable then no government support is needed; if it is not commercially viable, no amount of government support can make it so."

I gather that amongst its effects is an increase in the use of fertilizer, which, inter alia, runs down the Mississippi River into the Gulf of Mexico where it greatly adds to a scarily large and growing dead zone (no oxygen) in the Gulf.

Kinda amusing that, after the relentless drumbeat of "conserve," this item is being presented as a potential problem.

Surprise Drop in Power Use Delivers Jolt to UtilitiesBy REBECCA SMITH

An unexpected drop in U.S. electricity consumption has utility companies worried that the trend isn't a byproduct of the economic downturn, and could reflect a permanent shift in consumption that will require sweeping change in their industry.

Numbers are trickling in from several large utilities that show shrinking power use by households and businesses in pockets across the country. Utilities have long counted on sales growth of 1% to 2% annually in the U.S., and they created complex operating and expansion plans to meet the needs of a growing population.

"We're in a period where growth is going to be challenged," says Jim Rogers, chief executive of Duke Energy Corp. in Charlotte, N.C.

The data are early and incomplete, but if the trend persists, it could ripple through companies' earnings and compel major changes in the way utilities run their businesses. Utilities are expected to invest $1.5 trillion to $2 trillion by 2030 to modernize their electric systems and meet future needs, according to an industry-funded study by the Brattle Group. However, if electricity demand is flat or even declining, utilities must either make significant adjustments to their investment plans or run the risk of building too much capacity. That could end up burdening customers and shareholders with needless expenses.

To be sure, electricity use fluctuates with the economy and population trends. But what has executives stumped is that recent shifts appear larger than others seen previously, and they can't easily be explained by weather fluctuations. They have also penetrated the most stable group of consumers -- households.

Dick Kelly, chief executive of Xcel Energy Inc., Minneapolis, says his company, which has utilities in Colorado and Minnesota, saw home-energy use drop 3% in the period from August through September, "the first time in 40 years I've seen a decline in sales" to homes. He doesn't think foreclosures are responsible for the trend.

Duke Energy Corp.'s third-quarter electricity sales were down 5.9% in the Midwest from the year earlier, including a 9% drop among residential customers. At its utilities operating in the Carolinas, sales were down 4.3% for the three-month period ending Sept. 30 from a year earlier.

American Electric Power Co., which owns utilities operating in 11 states, saw total electricity consumption drop 3.3% in the same period from the prior year. Among residential customers, the drop was 7.2%. However, milder weather played a role.

Utility executives question whether the recent declines are primarily a function of the broader economic downturn. If that's the case, says Xcel's Mr. Kelly, then utilities should continue to build power plants, "because when we come out of the recession, demand could pick up sharply" as consumers begin to splurge again on items like big-screen televisions and other gadgets.

Some feel that the drop heralds a broader change for the industry. Mr. Rogers of Duke Energy says that even in places "where prices were flat to declining," his company still saw lower consumption. "Something fundamental is going on," he says.

Michael Morris, the chief executive of AEP, one of the country's largest utilities, says he thinks the industry should to be wary about breaking ground on expensive new projects. "The message is: be cautious about what you build because you may not have the demand" to justify the expense, he says.

Utilities are taking steps to get a better understanding of the cause. Some are asking customers who reduced usage to explain what is influencing them. Xcel and other utilities, for example, have been running environmentally focused campaigns to urge consumers to use less energy recently, a message that might be taking hold.

Power companies are also questioning the reliability of the weather-adjustment models they use to harmonize fluctuating sales from quarter to quarter. "It's more art than science," says Bill Johnson, Chief Executive of Progress Energy Inc., Raleigh, N.C.

If the sector is entering a period of lower demand -- which could accelerate further if the automotive sector collapses -- many utilities will have to change the way they cover their costs.

Utilities are taking a hard look at the way they set rates and generate profits. Many companies are embracing a new rate design based on "decoupling," in which they set prices aimed at covering the basic costs of delivery, with sales above that level being gravy. Regulators have resisted the change in some places, because it typically means that consumers using little energy pay somewhat higher rates.

In a taped speech shown to attendees at a climate change conference in California this week, Barack Obama continued trying to distract Americans from the enormous cost of making substantial reductions in carbon dioxide emissions by promising "five million new green jobs that pay well and can't be outsourced." Not only is this number pulled out of thin air; it's nothing to be happy about. As I've noted, the manpower required to transform the economy so that greenhouse gas emission targets can be reached is a measure of the cost involved. Obama makes it seem as if we should try to maximize this cost, promising that green jobs will "steer our country out of this economic crisis."

That is pretty much the opposite of the truth. As The New York Times notes, "some industry leaders and members of Congress have suggested that Mr. Obama's climate proposal would impose too great a cost on an already-stressed economy—having the same effects as a tax on coal, oil and natural gas—and should await the end of the current downturn." Obama's response is to portray the economic burden as a boon.

In the speech, he does implicitly make the case that the cost he refuses to acknowledge will be justified in the long run:

Few challenges facing America—and the world—are more urgent than combating climate change. The science is beyond dispute and the facts are clear. Sea levels are rising. Coastlines are shrinking. We've seen record drought, spreading famine, and storms that are growing stronger with each passing hurricane season.

Is it really "beyond dispute" that global warming already has produced drought, famine, and stronger storms? New York Times environmental reporter Andrew Revkin notes that "the statement about 'storms that are growing stronger with each passing hurricane season' is hard to square with the science on hurricanes in a warming world, which has gotten more nuanced of late."

Even if Obama were right about current conditions, and right that things will only get worse, what evidence is there that his cap-and-trade plan will ameilorate the trend enough to justify the cost? Assuming we meet his goal of an 80 percent reduction in carbon dioxide emissions by 2050 (a conveniently distant deadline), how much will it cost, what impact will it have on global warming, and how much damage will thereby be avoided?

Bjorn Lomborg, author of The Skeptical Environmentalist and Cool It: The Skeptical Environmentalist's Guide to Global Warming, argues that adapting to climate change is much more cost-effective that trying to prevent it, an effort he says is unlikely to have any measurable impact. Presumably Obama thinks Norberg Lomborg is wrong. I'd like to hear why. But that would require Obama to be more candid about the sacrifices demanded by his plan to create the Clean-Energy Economy of Tomorrow. It is difficult to perform a cost-benefit analysis you refuse to admit there's a cost.

Ron Bailey's interview with Lomborg appeared in the October issue of reason.

"Xcel Energy...saw home-energy use drop 3% in the period from August through September, "the first time in 40 years I've seen a decline in sales" to homes... doesn't think foreclosures are responsible for the trend."

I wonder why not. 50% of home sales are 'bank mediated'. Aren't most foreclosure homes empty?

Nonetheless, we need real increases in power and grid capabilities if we are thinking of plugging in a major part of the transportation sector within a couple of years. Doesn't a nuclear plant take 10 years to build? (Obama thinks we should "look into it...") I don't see how anyone can make strategic plans with all this uncertainty and with the direction of the economy dependent on government indecision.

Where is the MSM outrage over a government agency's destruction of its records?

How is this legal? This is a government coverup? I don't get it. This broad should be in jail. Not up for energy "Czar" which is just code for leftist eco-nazi thug.

The Clintons and their legalize slime balls are at it again.

He was one of the *worst* presidents because he brought ethics, honor, integrity, and politics itself down into the gutter.But of course the MSM adores him and his cronies and their ability to combat the "vast right wing conspiracy" which completely makes up these scandals.

Yes, as Michelle states, all this Clinton regression "we can't afford". Yet the clinton slime balls conned their way back to the limelight again. The crats I thought finally had someone else yet the cancer keeps creeping back.

I still feel BO made a huge mistake picking Hillary and her gang. Anytime we can keep the Clintons out of any power situation we must do so. They are sick.

Yet another Clintonite has been wheeled out of the political morgue to serve in the Obama administration. Carol Browner, a neon green radical who headed the Environmental Protection Agency from 1993-2000, is widely rumored to be the president-elect’s choice for “energy czar.” But an ethical cloud still hangs over Browner’s EPA legacy. It doesn’t take a team of Ivy League-degreed lawyers to figure out that this is one more headache the Hope and Change crew doesn’t need.

In the spirit of reaching across the aisle, let me dust off the cobwebs and help out all the smarty-pants vetters on the Obama team with a little background on Browner’s stained past:

On her last day in office, nearly eight years ago, Browner oversaw the destruction of agency computer files in brazen violation of a federal judge’s order requiring the agency to preserve its records. This from a public official who bragged about her tenure: “One of the things I’m the proudest of at EPA is the work we’ve done to expand the public’s right to know.”

Asked to explain her track-covering actions, the savvy career lawyer Browner played dumb. Figuratively batting her eyelashes, she claimed she had no clue about a court injunction signed by U.S. District Judge Royce Lamberth on the same day she commanded an underling to wipe her hard drives clean. Golly gee willikers, how could that have slipped by her?

According to testimony in a freedom of information lawsuit filed against EPA by the Landmark Legal Foundation, a Virginia-based conservative legal watchdog group, Browner commanded a computer technician on Jan. 19, 2001: “‘I would like my files deleted. I want you to delete my files.” Not coincidentally, the Landmark Legal Foundation had been pressing Browner to fully and publicly disclose the names of any special interest groups that may have influenced her wave of last-minute regulatory actions. Two days before she told her technician to purge all her records, EPA had gone to court to file a motion opposing the federal court injunction protecting those government documents.

Plausible deniability? Not bloody likely.

Incredibly, Browner asserted that there was no work-related material on her work computer. She explained she was merely cleaning the hard drive of computer games she had downloaded for her son, and that she wanted to expunge the hard drive as a “courtesy” to the incoming Bush administration. How thoughtful. Later, her agency admitted that three other top EPA officials had their computers erased despite the federal court order and ongoing FOIA case (the record is silent on whether Browner’s son was playing games on their desktops, too). A further belated admission revealed that the agency had failed to search Browner’s office for public documents as required by Landmark’s public disclosure lawsuit.

Not only were all the top officials’ hard drives cleared and reformatted, but e-mail backup tapes were erased and reused in violation of records preservation practices.

After a two-year legal battle, Judge Lamberth finally held the EPA in contempt of court for the systemic file destruction – actions Lambert lambasted as “contumacious conduct” (obstinate resistance to authority). As is typical in Washington, Browner weaseled out of any serious repercussions. Lamberth inexplicably decided that slapping the agency as a whole with contempt – rather than any individual – would deter future cover-ups.

Is this a gamble the Obama administration wants to take? Browner has crossed the line and violated public trust before in her capacity as eco-chief. Early in her first term as EPA head, Browner got caught by a congressional subcommittee using taxpayer funds to create and send out illegal lobbying material to over 100 grassroots environmental lobbying organizations. Browner exploited her office to orchestrate a political campaign by left-wing groups, who turned around and attacked Republican lawmakers for supporting regulatory reform. These are the very same groups – anti-business, anti-sound science, pro-eco-hysteria – that Browner would be working arm in arm with as Obama’s “energy czar.”

The incoming Obama administration is "closely monitoring" the innovative electric car project being developed by Israel's Better Place company, "and may be adopting it," Idan Ofer, chairman of Better Place, has told The Jerusalem Post.

Heralding a potential private transport revolution, a leading US car manufacturer is also now "putting together a team" to work on the project, Ofer said. Renault-Nissan agreed 18 months ago to build the first cars, and will be mass-producing hundreds of thousands of the electric-powered vehicles by 2010, he noted.

Ofer said the electric car was a natural fit for the Obama presidency as it prepares to grapple with the global financial crisis, environmental concerns, a dependence on oil supplies from unfriendly countries and a collapsing conventional car-building industry.

The crisis afflicting Detroit was underlined Thursday, when the Bush administration said it was seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing auto industry.

"There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about," said White House Press Secretary Dana Perino.

The comments came a day after Chrysler LLC announced it was closing all its North American manufacturing plants for at least a month as it, General Motors Corp. and Ford Motor Co. await word on government action. General Motors has also been closing plants, and it and Chrysler have said they might not have enough money to pay their bills in a matter of weeks.

Ofer said he was anticipating "the electrification of America" as Barack Obama's logical instrument for rescuing the industry, as well as promoting environmental responsibility, enabling reduced oil dependence and underpinning economic revival.

"This is very dear to the heart of the Obama administration," he said, noting that Obama's newly announced choice for energy secretary, Nobel physics laureate Steve Chu, "is a huge advocate of alternative energy. He says we must get away from oil."

Ofer said that "America spent somewhere between $500 [billion] and $700b. on imported oil in 2008." The incentive to shift away from that kind of dependence was overwhelming, he said.

When "you hear announcements" from the incoming administration about reviving Detroit with electric cars, job creation in battery factories and modernizing the national electricity grid, said the Better Place chairman, "you'll know that it will have come from us."

The Post was awaiting a response from Obama's officials at press time.

Obama officials said this week that the president-elect was laying the groundwork for a giant economic stimulus package, possibly $850b. over two years. Like public works projects of the depression era, they said, Obama's plan would feature spending on roads and other infrastructure projects as well as new and renovated schools. It also would aim for energy-efficient government buildings and development of environment-friendly technologies.

Better Place, established 14 months ago by entrepreneur Shai Agassi, aims to switch cars worldwide from the pump to the plug, using battery-powered electric vehicles that would recharge at parking meter-style "charging spots," on a grid powered by renewable energy.

Israel, Denmark and Australia are formally committed to the idea. Earlier this month, the Japanese government invited Better Place to work with its local car manufacturers on a first electric car venture. The state of Hawaii signed up to a pilot program last week.

The Renault-Nissan vehicles will cost about the same as conventional cars for now, but will ultimately be cheaper, said Ofer. He said they have comparable acceleration, can reach comparable speeds (of 150 to 180 kph) and can run 150-200 kilometers on a single battery.

Reminds me of how the Chevy CEO showed up to the last congressional grilling he had to endure driving a Chevy Volt. Of course the car only has a range of 40 miles so it had to ride on the back of a truck to the outskirts of DC. . . .

Much like with ethanol, electric vehicles are a lot more about sizzle than steak and have well known engineering issues to overcome before they are presented as solutions.

I would think electric cars would do better in Israel and Europe than America because they drive shorter distances regularly and the higher price of a gas. This guy isn't a policy maker making undelilverable policies he is someone running a business who thinks he can make money. Driving the Chevy volt after trucking it in certainly sounds like greenwash.

Idan Ofer was showing off his Better Place company's electric car to the visiting Austrian president, Heinz Fischer, outside the Dan Panorama hotel in Tel Aviv earlier this week. To Ofer's complete surprise, the Austrian head of state "broke all the rules," set aside such trifling considerations as security and insurance, and insisted on taking the vehicle for a spin.

"He simply took off," Ofer reports in a telephone interview, chuckling broadly down the line.

Which is precisely, Better Place's Chairman Ofer suggests, what is now happening to the whole electric car project. By his telling, it is an idea whose time has come, a revolution that, like the Austrian leader, is simply taking off.

Though he's keeping some of his cards close to his chassis, Ofer cautiously reveals that the nascent Obama administration "is closely monitoring Better Place and may be adopting it."

That's a staggering revelation, one that promises a fundamental overhaul of global private transport. But the inherent logic is unarguable.

Electric car technology has now reached maturity. Renault-Nissan, the pioneering manufacturing partner for the innovation of Better Place's founder and CEO Shai Agassi, will be mass producing hundreds of thousands of the electric-powered vehicles by 2010, Ofer says. The vehicles will cost about the same as conventional cars for now, but will ultimately be cheaper. They have comparable acceleration. They can reach comparable speeds (of 150 to 180 kph). And they can run 150-200 kilometers on a single battery, using hardly any power when idling in traffic (unlike their gas-guzzling predecessors).

Better Place is uniquely capable of overseeing the integrated system that enables them to operate, Ofer says. Barely a year after it was founded, with $200 million of venture capital, it is geared up to establish vast networks of the plug-in "charging spots" at which the cars refuel with their electric oil, and the battery swap stations that will ideally supersede today's gas stations.

The State of Israel is an enthusiastic partner, committed to the widespread deployment of an electric recharge grid to power vehicles by 2011. Denmark and Australia are on board. Earlier this month, the Japanese government invited Better Place to work with its local car manufacturers on a first electric car venture. Last week, the state of Hawaii announced it was driving up, too. The French "say they are with us," Ofer reports. "They want to be the first and the most innovative."

Sample "charging spots" are on display in the parking lot at Cinema City, north of Tel Aviv, and in London. Next year, more will be deployed, and many more in 2010, by which time, says Ofer, "we'll be selling real cars to real people."

AT THE same time as such practical progress is being made, critically, the imperative that is driving a change to electric cars has never been more obvious or more urgent.

On a planet whose responsible leadership and activists are unprecedentedly conscious of the environmental damage we foolish, selfish humans are wreaking, the electric car is a nonpolluter, with zero CO2 emissions.

In a Western world anxious to reduce its dependence on oil supplies from unfriendly countries, the battery car is a veritable panacea.

And then there's the small matter of the global financial crisis, snowballing just as the change-oriented Obama administration prepares to take office.

Obama's key priority will be to begin healing the American economy, to invest in new infrastructures, to create new jobs. Most pertinently for this venture, he's also grappling with an antiquated car-building industry on the brink of collapse and pleading for bail-outs. But just doling out money to Detroit, Ofer suggests wryly, paraphrasing a recent adulatory Thomas Friedman article in The New York Times, would be like propping up the typewriter industry in the age of the PC, home printer and Internet.

"Our way," enthuses Ofer, a former head of the United Mizrahi Bank, "is the only way."

What Agassi is doing with electric cars, he adds, citing another of Friedman's parallels, is much like what Steve Jobs of Apple has done for music - recognizing the astounding potential of new technologies, and harnessing them for a radically fresh means of providing mobility. As Friedman put it with his Steve Jobs simile, "It just takes the right kind of auto battery - the iPod in this story - and the right kind of national plug-in network - the iTunes store - to make the business model work for electric cars at six cents a mile."

Ofer is anticipating "the electrification of America" as Obama's logical instrument for achieving change, promoting environmental responsibility, enabling reduced oil dependence and underpinning economic revival. "This is very dear to the heart of the Obama administration," he says. "Just look at who Obama has chosen as energy secretary - Steve Chu. He knows his stuff. He's a huge advocate of alternative energy. He says we must get away from oil..."

Indeed so. Obama has promised to spend $150 billion on alternative energy over the next decade, and says he selected Chu, who won the 1997 Nobel Prize in Physics, as "uniquely suited" to steward the necessary innovations. At California's Lawrence Berkeley National Laboratory over the past four years, according to US News & World Report, Chu has backed research into advanced biofuels, solar power and energy efficiency, and fought shrewdly for funding from the federal government and private industry. Last year, he persuaded oil giant BP to sign onto a $500m. partnership for alternative energy research. In short, the magazine concluded, he's "a scientist who can find common ground with industry."

The incentive to shift away from those kinds of numbers is overwhelming, given the economic crisis, the environmental imperatives and the unsavory regimes this spending supports. And that's plainly where President-elect Obama is heading.

So listen up, Ofer says, for announcements from the new administration about reviving Detroit with electric cars, job creation in battery factories, modernizing the national electricity grid. "And when you hear those announcements," says the Better Place chairman, "you'll know that it will have come from us."

While Renault-Nissan took the pioneering plunge 18 months ago, some of the American car manufacturers have been highly resistant, he acknowledges. "I understand that. Some of them didn't believe in this. Others wanted some kind of hybrid. But now all serious car manufacturers recognize it's going to happen. It's the only way.

"Some of these firms are dysfunctional," he says with blunt cheerfulness. "I've had meetings where the top executives said 'No' to us, and the subsidiaries said 'Let's do it.'" But the inescapable truth, he insists, is that these companies are using yesterday's technology, and they are gradually internalizing this, in a process that is being catalyzed by their financial predicament. Significantly, says Ofer, "in the last few days, one of the big US manufacturers, which had been resistant, told us that he was putting together a team and planning an announcement."

Simply put, he notes, if the incoming president says "this is what we want you to do, and that way you'll stay in business" - and there's a very serious possibility of Obama saying precisely that - then that's what they'll do.

BETTER PLACE, Ofer stresses, doesn't make the cars. It has, rather, produced the integrated system for their operation. "We set up the charging spots, which look like little parking meters," he says. "We set up the battery swap places, generally in gas stations." And the firm makes its money, of course, by running the network.

"Better Place's model means consumers subscribe to transportation as a service, much like they do today with mobile phones," the company's Web site explains. "Auto companies make the electric cars that plug into the Better Place electric recharge network of charging stations and battery swap stations. Energy companies provide the network's power through growing renewable energy projects. And Better Place provides the batteries to make owning an electric car affordable and convenient."

Better Place is "uniquely advanced in this," Ofer claims, noting that Agassi is a former systems integrator for Germany's SAP software firm. "It's not so easy to put down 500,000 charging spots across Israel by 2011. In Tel Aviv for example, the mayor likes the idea. But it's complicated. There isn't a lot of parking space under buildings, so our charging spots will be in the streets, where there's not much room either. Do you keep such spots exclusive for electric cars? Like I said, it's complicated."

Better Place's "e-mobile" drivers will charge up at home, in the office, or on the street. "But we're not talking about simply plugging in, like a milk cart," he says of the sophisticated powering process. Rather, there will be options - cheaper and more expensive packages, prioritizations, different rates for charging at different times of day. "Somebody might have a cheaper option where they only want to be charged during the night... These kinds of options are very good for the national electricity grid because they spread demand more efficiently."

By next year, the company expects to have a major visitor center open here to promote the technology. "Already, the Foreign Ministry is telling us that most every foreign delegation wants to visit Better Place, that it's the biggest innovative draw in Israel."

"Imagine the Israel of 2011 is flooded with electric cars," he urges. "Your conventional car will be worthless. There'll be a natural migration to electric cars.

"Now remember," he goes on, "the average car in Europe is replaced every eight years." Governments will increasingly be offering incentives to drive and park electric cars. "Of course they will. It gives them silent cities, unpolluted cities. Think of the savings in public health costs as a result of the reduced pollution."

And the more that people see that it's real, he says, "the more research resources they will devote to improving the technology even further."

Hopefully, he adds, there will be an intensifying push to generate the electricity from alternative energy sources, too: Better Place was reported earlier this year to be planning a vast solar energy field in the Negev for the purpose.

Ofer concludes with the assertion that even the least enthusiastic players are gradually being drawn into the electric era. Until recently, he says, the powerful German manufacturers were taking the view that their industry was just fine. "German car executives are very influential. They are not geared up for this. They are the most resistant," he says. "But now I'm even feeling a shift from negative to positive there. And the moment the US shows signs of going electric, they'll turn around completely."

This piece notes why fuel economy standards are anti-market and ineffective for a number of reasons. If does not note how CAFE standards also cause traffic deaths by putting less substantial vehicles out on the road.

Politicians want you to pay more when you drive. They just won't admit it.

Ronald Bailey | January 27, 2009

"We must ensure that the fuel-efficient cars of tomorrow are built right here in the United States of America," President Barack Obama declared yesterday. He also signed an order directing the Environmental Protection Agency (EPA) to review the denial of California's request to set its automobile mileage standards higher than those adopted by the federal government.

In 2007, Congress passed and President George Bush signed legislation aimed at increasing Corporate Average Fuel Economy (CAFE) standards to at least 35 miles per gallon (mpg) by 2020, up from 27.5 today. Federal CAFE standards were originally set in 1975 during the first "energy crisis." If an automaker's average mileage fails to meet the CAFE standards, it must pay a fine which currently stands at $5.50 per 0.1 mpg, multiplied by the manufacturer's total domestic production. Some companies choose to simply pay the penalty. For example, BMW handed over $230 million in fines last year while Daimler, the maker of Mercedes-Benz automobiles, paid $55 million, and Volvo paid $56 million.

Now, California and 13 other states, representing about 50 percent of the U.S. automobile market, want to force carmakers to meet the 35.7 mpg standard by 2016, rising to 42.5 mpg in 2020. Proponents argue that the higher mileage standard is needed to both cut the emissions of greenhouse gases that are contributing to man-made global warming and to reduce our dependence on foreign oil.

Do CAFE standards work? The CAFE standards established in 1975 during the first "oil crisis" explicitly aimed to reduce America's dependence on imported oil. In 1975, the U.S. imported about one-third of the petroleum it consumed. By 2008, imports accounted for about two-thirds of consumption. On the other hand, a National Academy of Sciences (NAS) report in 2002 estimated that CAFE standards had reduced U.S. oil consumption by 14 percent below what it would otherwise have been.

In 2007, the Pew Campaign For Fuel Efficiency released a poll in which 89 percent of respondents said that it was important for Congress to pass higher automobile fuel efficiency standards. Whatever Americans might tell pollsters, they voted quite differently with their pocketbooks. For example, CAFE standards on passenger vehicles had a big unintended consequence—the rise of sport utility vehicles (SUVs). Mileage standards for light trucks were set lower at 20.7 mpg and SUVs and minivans qualified as light trucks. In 1975, only 20 percent of vehicles sold were light trucks, but by 2002, that had risen to more than 50 percent of vehicles. In 2002, the San Francisco Chronicle reported that the EPA's 10 most fuel efficient models constituted less than 2 percent of auto sales. As recently as 2007, none of the top 10 vehicles chosen by consumers voting at the popular website CarGurus.com had an average gas mileage that met current federal CAFE standards

In his announcement yesterday, Obama estimated that the new federal mileage standard would save 2 million barrels of oil per day. Although estimates vary considerably, boosting fuel efficiency is not cost-free. California Air Resources Board Chair Mary Nichols endorses a rosy scenario, claiming that the state's new standards will only add about $400 per car. On the other hand, General Motors Vice Chairman Bob Lutz apocalyptically predicts that even the less stringent new federal CAFE standards will boost car prices by $4,000 to $10,000 per vehicle, averaging around $6,000. The Energy Information Administration's middle of the road calculation is that the new California regulations would add about $1,900 in costs to each vehicle. Essentially, CAFE standards function as a kind of inefficient stealth tax on driving. It's inefficient because drivers pay more, car companies make less money, and state and federal governments don't get any extra revenues.

But CAFE proponents argue that there is a bright side—the higher costs for the gas-sipping cars will be offset by lower gas bills. For example, a car driven 12,500 miles per year at 27.5 mpg would use 454 gallons of gas annually. Raising the mileage to 35 mpg reduces that figure to 357 gallons per year. So the new California standards would save drivers an average of 100 gallons per year. At $1.50 per gallon that comes to $150 per year; at $4 per gallon it comes to $400.

Politicians claim that manufacturing the new CAFE-compliant cars will increase jobs in the auto industry. But will it? All other things being equal, increasing the price of a product is not usually considered a sure fire recipe for attracting more customers. Higher prices mean lower demand, something that normally results in fewer jobs in the auto industry. On top of that is the fact that it takes fewer workers to manufacture the generally smaller cars that meet CAFE standards. It's hard to see how higher CAFE standards will produce more jobs.

If California's state legislators—and the other politicians who favor the new higher mileage standards—really want their citizens to drive more fuel efficient (and generally smaller) cars, there is a simpler and more honest policy: Hike gasoline taxes substantially. In 2002, the NAS's report correctly observed, "There is a marked inconsistency between pressing automotive manufacturers for improved fuel economy from new vehicles on the one hand and insisting on low real gasoline prices on the other. Higher real prices for gasoline—through increased gasoline taxes—would create both the demand for fuel efficient new vehicles and an incentive for owners of existing vehicles to drive them less." In other words, taxing gasoline would achieve the politicians' stated goals of reducing imports of foreign oil and cutting greenhouse gas emissions much more efficiently than convoluted CAFE standards—since taxes would apply to all vehicles, not just new ones.

The NAS further noted that more models of high mileage cars were produced abroad largely because gasoline in other countries costs $4 to $5 per gallon. Last year, we learned definitively that Americans respond with alacrity to higher fuel pump prices. As gasoline prices soared to over $4 per gallon, consumer demand for smaller cars rose by 37 percent over the previous year. At nearly 64 cents per gallon, California already imposes the highest gasoline tax in the country, yet Californians continue to insist on buying and driving cars of which their legislators disapprove. Ultimately, setting CAFE standards is just a way for cowardly politicians to avoid telling their fellow citizens that they should pay more for the privilege of driving.

Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

This vapid piece fails to address the fundamental issue: ethanol production is inherently inefficient and diverts materials from more economically feasible uses.

February 12, 2009Ethanol, Just Recently a Savior, Is Struggling

By CLIFFORD KRAUSSBarely a year after Congress enacted an energy law meant to foster a huge national enterprise capable of converting plants and agricultural wastes into automotive fuel, the goals lawmakers set for the ethanol industry are in serious jeopardy.

As recently as last summer, plants that make ethanol from corn were sprouting across the Midwest. But now, with motorists driving less in the economic downturn, the industry is burdened with excess capacity, and plants are shutting down virtually every week.

In the meantime, plans are lagging for a new generation of factories that were supposed to produce ethanol from substances like wood chips and crop waste, overcoming the drawbacks of corn ethanol. That nascent branch of the industry concedes it has virtually no chance of meeting Congressional production mandates that kick in next year.

The decline in fortunes has been extreme for both kinds of ethanol since last summer, when $145-a-barrel oil appeared to shift fuel economics in their favor.

Only months ago, refiners in some regions were buying up as much corn ethanol as they could to blend with expensive gasoline, effectively keeping pump prices down slightly. Meanwhile, investors seemed willing to finance plants to produce next-generation biofuels.

But since the summer, oil and gasoline prices have plunged, while the price of corn, from which virtually all commercial ethanol in this country is made, has remained relatively high. Refiners are limiting their ethanol purchases to a level required to meet federal blending mandates — a level far below the industry’s capacity.

“The ethanol industry is on its back despite the billions of dollars they have gotten in taxpayer assistance, and a guaranteed market,” said Amy Myers Jaffe, an energy analyst at Rice University.

The government’s Energy Information Administration recently projected that the industry would fall short of the targets for expanded use of ethanol and other biofuels that Congress set in a 2007 energy law. “It’s possible we may have to look at the targets again,” said Senator Jeff Bingaman of New Mexico, the chairman of the Senate Energy and Natural Resources Committee.

VeraSun Energy, one of the nation’s largest ethanol producers, has suspended production at 12 of its 16 plants and is planning to sell production facilities. In recent days Renew Energy, Cascade Grain Products and Northeast Biofuels have filed for bankruptcy protection. Pacific Ethanol said it would suspend operations at its Madera, Calif. plant.

Bob Dinneen, president of the Renewable Fuels Association, a trade group, estimated that of the country’s 150 ethanol companies and 180 plants, 10 or more companies have shut down 24 plants over the last three months. That has idled about 2 billion gallons out of 12.5 billion gallons of annual production capacity. Mr. Dinneen estimated that a dozen more companies were in distress.

Ronald H. Miller, the president and chief executive of Aventine Renewable Energy, said, “The economics right now are very poor.” Aventine has suspended construction of one Nebraska plant and delayed completion of a second in Indiana.

This is not how it was supposed to be when Congress mandated in 2007 that refiners blend increasing amounts of ethanol into the country’s transportation fuel supply. The law came at a time when the country’s thirst for gasoline seemed unquenchable, and oil prices seemed only to go up.

In an effort to reduce the country’s dependence on foreign oil and to lower the greenhouse gas emissions that contribute to global warming, Congress mandated a doubling of corn ethanol use, to 15 billion gallons a year by 2015. Congress also mandated, by 2022, the use of an additional 21 billion gallons of ethanol and other biofuels produced from materials collectively known as biomass. The potential materials include corn stubble, wood chips and straw.

Congress hoped that advanced biofuels would overcome the longstanding controversies associated with corn ethanol, including the contention that its production raises food prices. Congress started small, decreeing that industry produce 100 million gallons of advanced biofuels next year and 250 million gallons in 2011. But it is becoming clear that even these modest targets will not be met.

Producing the advanced fuels entails breaking down a tough material, cellulose, that is abundant in corn cobs, wood chips and other biological waste, then converting it to liquid fuel. While scientists have proven it can be done, the cost is still high, and little if any cellulosic ethanol is being produced at commercial scale.

Carlos A. Riva, president and chief executive of Verenium, a company working to produce ethanol from sugar cane waste, said that solving the technological hurdles for this type of fuel was “not a slam dunk.” But he and other executives say they are optimistic the challenges can be overcome, and the 2011 and 2012 targets may be met a few years late.

Small, mostly private companies that go by names like Range Fuels, Poet and BlueFire Ethanol have built pilot plants and hope to move into commercial production. But private investment in advanced biofuels has plummeted since the economy went sour late last year, and it is unclear if the industry can scale up. “Cellulosic ethanol is something that is always five years away and five years later you get to the point where it’s still five years away,” said Aaron Brady, an energy expert at Cambridge Energy Research Associates, a consulting firm.

With gasoline consumption declining even as federal mandates for ethanol are increasing, demand for cellulosic ethanol may be insufficient anyway.

Energy experts project that national gasoline consumption in 2009 and 2010 will be 6 percent or more below the 2007 level, and future ethanol production targets could represent more than 10 percent of gasoline production. Since regulations set a 10 percent blend limit for ethanol in most gasoline, there would be no place for ethanol production to go.

“Without moving the blend wall, there is no future for cellulosic ethanol,” said Jeff Broin, president and chief executive of Poet, a company with interests in corn and cellulosic ethanol.

Automobile manufacturers say most of their cars are not designed to run on higher ethanol concentrations. But the Environmental Protection Agency and the Department of Energy are conducting studies to see if the 10 percent limit could be raised.

Senator Bingaman said he expected those tests to be completed over the next year or so, and he would like to see higher blend levels for ethanol.

“There’s no doubt when we wrote that bill, we did not anticipate the recession we are currently sinking into,” he said. “Exactly what that requires us to do as far as changing the law, I am not clear on yet.”

Also, I gather that all the increased farming to produce the ethanol uses fertilizers which run down the Mississippi River into the Gulf of Mexico where a very large and growing oxygen void "dead zone" is killing pretty much everything in to , , ,

if US oil producers could only start investing into drilling off the continental shelf our ability to reduce our dependence on foreign oil would probably be faster than by doing anything else (like Brazil).

Why O'Reilly and other sensible people keep making excuses for BO; that is he is really more moderate than Pelosi....This guy is just as much a far left loon as the rest of the Pelosi et al.He was the most liberal voter in the Senate. When Pelosi says she will watch BO's back she meant she will help him appear to be the moderate when in fact he is rooting/supporting for her policies hook line and sinker.

KARBALA / Aswat al-Iraq: Iraqi Minister of Oil Hussein al-Shahrestani on Saturday said that Iraq has an oil reserve that will suffice for the next 100 years.“Iraq has an estimated 400 geological compositions that have not yet been discovered,” the minister told several reporters, including a correspondent for Aswat al-Iraq news agency, during his visit to Karbala city today.

Good point.So we can increase our dependence on foreign oil till we can develop alternative fuels (if ever).It sounds to me that it would be decades before alternative will be able to replace and not cmplement oil.

I hate to say it but I hope BO *fails"! I have come to the conclusion that it would be better for the US to go through more pain now than for us and our children to have a future that is controlled by the likes of BO.

Maybe the conservatives are closer to the truth about going back to conservative basics. I just don't know. I just can't see how calling for tax cuts is anywhere enough of an answer to our problems and additionally that will NOT IMO increase the Republican base and the demographics are changing. And of course crats are doing everything they can to speed this up.

Medical care is already so regulated that I am resigned to socialized care. I don't think most doctors and even most of my patients seem to understand what we are in for with regards to big goernment takeover of medicine. Yet I admit costs are out of control and the private sector has not stemmed the increase.

In the Washington Post today, staff writer Steven Mufson [1] gets space on the front page to tell us about how the oil price collapse is playing out for oil producers, rival energy generators, and, ultimately, for consumers. Much of what follows is obvious — prices are declining because the economic collapse is hammering demand — but other aspects of the narrative offered by Mufson are on shakier ground.

Ed Morse — managing director and chief economist of LCM Research and a favorite “go-to” guy for print reporters — says, “The last five years saw the rebirth of the use of oil as a critical instrument of foreign policy by key resource countries, Iran, Russia, and Venezuela in particular. With oil and natural gas prices having collapsed, the power of their weapons has been waning rapidly…” Really? When, exactly, have oil-producing states used oil as a weapon in foreign policy over the course of the 2004-2008 price spiral? Have there been embargoes I’ve missed? Strategic production cutbacks tied to the Israeli occupation of the West Bank? Or substantive threats about the same that have been used as an effective lever in international relations? Not that I know of.

The only example I am aware of that Morse might cite to back up his claim is Russia’s ongoing dispute with Ukraine over natural gas prices. But gas producers have leverage in markets that oil producers don’t have, given the much higher transaction costs associated with changing buyer-seller relationships.

In short, Morse’s first claim — that oil producers have been using oil as an effective foreign policy weapon during the boom — is utterly without foundation. His second claim conflates natural gas with oil markets in a manner that muddies the issue. Belief in the “oil weapon” is like belief in UFOs; lots of people claim to have seen such things — and some continue to fear such things — but every attempt at verifying existence has [2] come up empty. The reality is that embargoes can’t deny oil to consuming states given the fungible nature of the international oil market and severe production cutbacks will do far more harm to producers than consumers — which is why we never see those sustained production cutbacks play out.

Next, Mufson implies that energy secretary Steven Chu made some sort of gaffe when he told reporters on Tuesday that OPEC was “not in my domain.” Now, it may be correct that, politically speaking, OPEC is in his “domain,” but the reality is that American pressure on OPEC never has and probably never will have an effect on decisions made by the cartel. OPEC’s aim, after all, is to maximize revenue. Can the U.S. talk OPEC into decisions that will cost OPEC money? Chu’s right to suggest that no mere U.S. energy secretary is capable of such a thing and probably [3] shouldn’t waste much time laboring for such an unlikely end. Bully for Chu — for a few moments at least, he had the courage to say what almost no energy secretary before him has ever dared to say.

Unfortunately, Chu quickly spends his intellectual capital with me in the very next paragraph when he warns that oil prices will likely rise over time. Well, they may, but there is no statistically significant trend toward higher oil prices if we examine quarterly data from 1970 forward. Oil prices move around a lot, but they have always migrated back toward an equilibrium price in the inflation-adjusted mid-$20 range. The belief that oil prices march ever higher over time is widely shared, but [4] has no historical basis.

Chu’s worries about higher prices dovetail with the related warning (this time, from OPEC president Chakib Khelil) that the price respite is only temporary. Soon enough (two years, Khelil says), demand will pick up again and then where will we be? Low oil prices mean cuts in upstream investment which means that, down the road, we’ll get even higher prices than we would have had, had the price collapse never occurred.

Now, it is true that the oil market always has and probably always will move in boom and bust cycles with price spirals and price collapses feeding off one another. But historically, those cycles take a lot longer to play out than a couple of years. We heard the same warning against complacency in 1986 when oil prices went through their last bust cycle — but it wasn’t until 18 years later (2004) that prices recovered and moved into boom cycle once again. And that experience is fairly typical. The time between peaks and valleys in global oil prices run about 20 years apart and have been doing so for over 100 years.

Producers love to warn against low oil prices because, well, they hate them. But the idea that low prices are bad for consumers is one of those things that is so obviously at odds with the reality that one should take such warnings with a heavy block of salt. Domestically, those warnings have been used to justify producer subsidies that fail to pass any reasonable economic test.

Do low oil prices “make it harder for more expensive wind and solar projects to compete,” as Mufson asserts? No. Wind and solar energy does not compete with oil because only a tiny amount of electricity is generated by oil in the United States. Low coal and natural gas prices make it hard for wind and solar to compete. True, fossil fuel prices tend to move roughly in tandem over time, but precision is everything here. Low oil prices do not “cause” natural gas and coal prices to fall and thus do not directly undercut wind and solar.

Finally, what about the dog that’s not barking — that is, what about the claim heard ad infinitum from people like Thomas Friedman and James Woolsey that oil profits are military steroids for Islamic terrorists and that eliminating the same would cut Islamic terrorism off at the knees? So far, we find little evidence that al Qaeda or related groups have been particularly harmed by low oil prices. That shouldn’t surprise — there is no historical correlation between oil prices and Islamic terrorism — whether we’re looking at number of terrorist attacks or fatalities from the same.

Energy Secretary Steven Chu may be a Nobel laureate Ph.D. in physics, but his first forays into energy policy suggest he's a neophyte when it comes to the ways of Washington.

At a forum with reporters on Thursday, the head of the department that has traditionally taken the lead on global oil-market policy, was asked what message the Obama administration had for the Organization of Petroleum Exporting Countries at its meeting next month.

"I'm not the administration," the Cabinet secretary replied. "I will be speaking and learning more about this in order to figure out what the U.S. position should be and what the president's position is."

Chu, who is still without a deputy, said he feels "like I've been dumped into the deep end of the pool" on oil policy.

The day before, reporters asked him about OPEC output levels after a speech to a group of utility regulators. He responded that the issue was "not in my domain."

Later, in a conference call to reporters, he said his answer reflected "more of my naiveté than anything else."

Obama’s energy secretary surprised to learn he’s in charge of oil policyposted at 7:11 pm on February 20, 2009 by Allahpundit

Like Treacher says, the difference between Obama and Jesus is that Jesus knew how to assemble a cabinet.

At a forum with reporters on Thursday, the head of the department that has traditionally taken the lead on global oil-market policy, was asked what message the Obama administration had for the Organization of Petroleum Exporting Countries at its meeting next month.

“I’m not the administration,” the Cabinet secretary replied. “I will be speaking and learning more about this in order to figure out what the U.S. position should be and what the president’s position is.”…

The day before, reporters asked him about OPEC output levels after a speech to a group of utility regulators. He responded that the issue was “not in my domain.”

He confessed later to, er, “naivete.” File this away in the “Confidence Boosters” drawer along with Krauthammer’s piece today on The One’s early foreign-policy wobbles and that WaPo story from a few days ago about how Geithner, given two months to prepare a financial rescue plan, had to scrap the whole thing at the last minute and go a different route. Exit question: At least the Transportation Department’s has its eye on the ball, right?

DAVID BOILY/AFP/Getty ImagesA woman holding small Canadian and U.S. flags outside the Canadian parliament building in Ottawa, OntarioSummaryU.S. President Barack Obama visited Canada on Feb. 19, where he discussed energy and environmental issues with Canadian Prime Minister Stephen Harper. A potential deal regarding Canadian oil sands could affect greenhouse gas emissions protocols, and has implications for regional oil-producing state Venezuela.

AnalysisU.S. President Barack Obama visited Canada on Feb. 19, marking his first foreign trip since his inauguration. Obama met with Canadian Prime Minister Stephen Harper for talks that focused on interrelated energy and environmental issues.

It is pretty clear what the two states want from each other. The United States wants energy security and a renewed military commitment from Ottawa in Afghanistan, while Canada wants investment of money and technology in its energy sector and cooperation on dealing with related environmental issues. The Feb. 19 discussions presage more comprehensive negotiations that ultimately could reshape the global framework for dealing with greenhouse gas emissions — and could deal a blow to the energy industry in Venezuela.

Energy security is a key strategic concern of the United States, and Canada is the largest foreign supplier of crude oil to the U.S. market (followed by Saudi Arabia, Mexico, Venezuela, Nigeria and Iraq, in that order). In addition to its proximity, Canada is an attractive energy trading partner for the United States because it does not face the same challenges that limit Washington’s ability to rapidly increase supplies from other significant producers — such as a hostile government in Venezuela’s case, legislation restricting foreign participation in Mexico’s case, or militancy in the case of Nigeria.

Securing robust oil supplies from Canada will necessarily mean expanding exploitation of oil sands, which comprise most of the country’s crude production. (Canada produces only a small amount of conventional crude.) This is an expensive proposition, however. Oil sands are not like conventional crude, which can simply be pumped and shipped via pipeline. Instead, they have to be strip-mined and then melted to extract the crude — a machinery- and energy-intensive process. The resulting cost barriers have resulted in a freezing of new work on oil sands since the ongoing global recession has driven oil prices downward. Profitable oil-sands production requires a sustained crude price of $50 to $60 per barrel, but oil prices have been well below that level since the end of 2008.

The U.S. interest in energy security and the Canadian interest in boosting investment appear to be in sync on the oil sands issue, and Harper has been pushing for a deal. But Ottawa has two conditions.

The first is that the United States provide the bulk of the investment. Canada wants to smooth out the boom-bust cycle of energy production in general, and that of oil sands specifically. Because oil prices have not reliably stayed above the break-even point for oil sands production (despite a spike in mid-2008), oil companies are not likely to invest in the process on their own initiative.

Second, there is a greenhouse gas issue. The mining and processing of oil sands requires a considerable energy input in its own right, roughly 50 percent more than that of normal crude. Oil sands production by itself is thwarting Canada’s ongoing efforts to comply with its obligations under the 1997 Kyoto Protocol, and Canada hardly uses any of the crude it produces. Ottawa simply cannot meet these requirements as long as it is producing oil sands at all, much less expanding production.

Thus, Canada wants the United States to join it in taking a common position on greenhouse gas talks globally — or really, for the two to become a single entity for purposes of meeting treaty guidelines. In other words, the United States would become primarily responsible for picking up the carbon tab from the production of Canadian oil sands. The United States would take on a slight — but not crippling — increase in costs associated with emissions-reduction efforts, in return for the benefits of a strategic oil supply deal with Canada.

As a result, Washington would also share with Ottawa technological advances in the capture and sequestration of carbon from the oil-sands production process. This technology is now being tested on coal power plants in the United States, and as the technology matures, Canada will try to apply it to the oil sands. Once the carbon is captured and sunk underground, the emissions-related costs associated with the oil sands will become much less.

In return for these strategic concessions, Washington likely also will want a commitment from the Harper government to extend its military commitment in Afghanistan. Canada has about 2,700 troops deployed in the country, though its military commitment there is scheduled to end in 2011. With Afghanistan occupying one of the top slots in Obama’s foreign policy agenda, and with Washington embarking on a new military strategy of a U.S. and allied troop surge to fight the Taliban insurgency, continued military cooperation might be the price Ottawa will have to pay to secure its stake in a strategic energy and emissions deal with Washington. Attempting to deploy additional troops would trigger a backlash from Harper’s political opponents, but extending Canada’s commitment beyond 2011 at the current level might be more politically palatable.

Should such a comprehensive deal go through, with all its conditions and counterconditions, it will have two major implications internationally: one regarding greenhouse gases and one regarding Venezuela.

First, a joint U.S.-Canadian position on greenhouse gases will more or less determine the boundaries of any future global legal regime for dealing with the issue. The United States is set to emerge as the global leader in negotiating the next major climate treaty, a protocol to the 1992 U.N. Framework Convention on Climate Change. The Obama Administration has signaled that it is willing to accept the general global consensus that the world must reduce greenhouse gas emissions by 80 percent before 2050 — and with that, the United States is emerging as the leader in the next round of talks. (And if Washington and Ottawa effectively act as a single entity in these negotiations, Canada will share the driver’s seat.) How that will shape global carbon policy will be up to Canada and the United States to debate, but any new protocol will also require a more informal mechanism that directly engages China and India, two of the countries with the largest carbon footprints. A failure to get Beijing and New Delhi on board would effectively doom any new protocol — and the United States would be unlikely to ratify any such convention in any case, believing it will be penalized while China and India gain.

The second major effect of a U.S.-Canadian understanding on oil sands would be to wreck the future hopes of the other major producer of nonconventional crude oil in the Western Hemisphere: Venezuela. The Venezuelan Orinoco belt contains roughly the same amount of oil as do the Canadian oil sands. Venezuela’s crude, like the output of the oil sands, is considered “unconventional” output, because it is very heavy and sour. It requires specialized refining processes, as does oil-sands crude, and a significant percentage of it — about two-thirds of Venezuelan exports — is refined in the United States. If Canada should absorb all the limited investment capital available for unconventional crude, and if it should take over the heavy crude refining capacity in the United States along with the available specialized technical knowledge and personnel, Venezuela will largely get shut out of the global market as its own industry degrades. The result would be to put further limits on the ability of the Chavez government in Caracas to use oil revenues to support the populist policies that keep it in power.

It crosses my mind as I fill up at 1.80 per gallon that no one (not just here) points out the role that unaffordable energy played in collapsing the global economy. I remember that gas used to be the example of inelastic demand. As a country, we refused to drill, build or refine more product, but as consumers, our usage is a little bit inelastic in the short run and within certain ranges. For example, when gas went from 50 cents to 60 cents or from 1.19 to 1.29 per gallon, people still lived the same distance from work, from church, from Grandma's house, from the store etc. so we bought the same amount of gas. When we replaced our vehicle we still needed the same number of seats and hauled the same cargo.

When gas prices double and triple, we started combining some trips and thinking about sharing rides with family, friends and co-workers. At $4 per gallon and $80 per tank or at some higher number, we gradually change our usage but we keep buying the product until bankruptcy because we still need to get places to live our lives. As consumers, gas was still a relatively small piece of the family budget.

But as oil hit $120-$150 per barrel, there were places around the globe less prosperous than the US that cried uncle first. All the data seems to indicate that the current downturn hit the rest of the world first and hardest. Factories shut down and workers were laid off. That leaves me to believe that energy prices around the world, not just Fannie, Freddie and other US shenanigans, played a major role in the global meltdown.

Today we don't talk about energy shortage because gas prices are artificially low. But they are low because of financial ruin. If/when the economy rebounds around the world, we still have the same energy shortage or worse that we had.

Instead of addressing the energy shortage, the far-left machine is hellbent on crippling supplies for the future. Somewhere in that debacle is an opportunity for an out of power party to gain traction and bring forward a positive agenda.

"But as oil hit $120-$150 per barrel, there were places around the globe less prosperous than the US that cried uncle first. All the data seems to indicate that the current downturn hit the rest of the world first and hardest."

This seems perceptive to me and accords with Alan Reynolds post , , , somewhere here making the point that the downturn started outside of the US.

Ken Nahigian, former Chief Counsel of the Senate Energy Committee, comments on the failure to fund the Yucca Mountain nuclear storage facility:

President Obama has spent the last two years talking about his commitment to clean energy but he has not signaled any desire to expand nuclear power generation. Why? Because the environmental community has spent the past 30 years hyping concerns over the safety of nuclear power – to the extent that no nuclear power plant ordered after 1977 has been completed and brought on line in the United States. Nuclear power is emission-free energy generation. Something the President declares as critical to our future, but yet he is quietly making every move possible to ensure that not a single plant gets built during his Administration, and therefore for the decade to follow his departure. This despite him staring directly into the camera during one of the Presidential debates and conveniently declaring his support for nuclear power.

Nuclear power constitutes 20 percent of the electricity used in the United States. That’s right, one fifth of all electricity consumed. In order to keep pace with the growing demand for electricity in the United States we must continue to expand our energy generation, not shrink it. While the benefits of renewable energy are many, the reality is solar and wind power constitute two percent of all domestic energy production, and to increase it to even eight percent will require massive transmission improvements. All the while the President and Senate Majority Leader Harry Reid plan to stand by and let 40 of the current 104 nuclear plants in the U.S. potentially become decommissioned over the next 30 years. That’s a potential decrease in electrical power generation of eight percent.

Nuclear-waste management remains an issue at the forefront of the nuclear expansion debate. There is significant debate as to the responsibility of the Government in the management and storing of nuclear waste. The Federal government has proposed a single deep geological storage reserve for spent fuel in Nevada at Yucca Mountain as a substitute to the national security threat posed by storage onsite at nuclear facilities.

But bottom line, the involvement of Nevada equals Harry Reid equals no Yucca Mountain storage equals no new plants for the next two decades equals dozens of plants will be decommissioned equals an eight percent reduction in clean and safe energy equals another loss for the country. And why? Because of the environmental special interest. The same type of special interests that the President pledged to transcend. ASO member Ken Nahigian

Count me amongst those doubtful of nuclear power, but I post this thoughtful article anyway.====================

By JOSEPH RAGOWashington

On the one hand, environmentalists claim that climate change is a "planetary emergency," perhaps the greatest threat ever to face humanity. On the other, nuclear energy is still verboten in the green catechism -- despite the fact that it provides roughly one-fifth of U.S. electricity, all of it free of carbon emissions. And without more nuclear power, it is nearly impossible to see even the glimmers of any low-emission future.

Zina SaundersJ. Wayne Leonard, chairman and CEO of Entergy Corp., one of the largest U.S. energy companies and the No. 2 generator of nuclear power, is no stranger to the many contradictions of American energy policy. "Everybody's gums are still bleeding from the '70s," he says of nuclear power, noting that today's technology is far superior to its Three Mile Island vintage.

The avuncular Mr. Leonard, who lives in Louisiana, made his name in nuclear, and over the last nine years as Entergy CEO he has achieved the highest total shareholder return in the nuclear power industry. But now his thoughts are concentrated on more lasting matters -- namely, his deep-seated concern about climate change.

Does he think nuclear energy has a larger role to play in that effort?

"Is it nuclear?" Mr. Leonard asks in Entergy's D.C. office. "Are you really going to mandate nuclear? I don't think so. I mean, mandate private businesses at the kind of prices we're taking about, and the kind of risks? That's pretty tough to do. You'd have to turn all of us into France" -- 79% of its electricity is nuclear -- "and have a government-sponsored program. I don't see that as consistent with what made this country into what it is today."

Mr. Leonard thinks like an economist. He talks about "efficiency" and "maximizing consumer surplus" the same way other utility executives talk about rate schedules and voltage. The most important thing the government can do on climate change, in Mr. Leonard's estimation, is to change the incentives for producing -- or, not producing -- carbon. His answer on the role of nuclear was revealing about his mentality: Set the price, and market forces, not government, will make the decisions.

"We see ourselves as a market economy, and that's created great wealth for society over time," he says, "but we're a market economy that doesn't have price signals for CO2."

Entergy belongs to the swarm of major energy companies that are -- contrary to type -- practically begging Washington to create a cap-and-trade program. Mr. Leonard supports President Barack Obama's plan to slash emissions 80% by 2050. It sounds strange: Lobbying the government to tax your products is generally not taught in business school.

But then, a lot of companies stand to make a bundle off cap and trade. Once Congress puts a ceiling on emissions, and then allows businesses to sell any of its extra allowances that stand for the right to emit, it is essentially creating the world's largest commodity market -- in carbon-backed securities. These will be extremely valuable, and everything comes down to how the government chooses to distribute them.

Mr. Leonard thinks the allowances should be auctioned off, rather than given away. So does the White House. Then the billions in new revenues that cap and trade would raise every year should be returned to the public. "Ideally you want to recycle it all, give all the money back," he says.

That's the purist's view on cap and trade -- and it puts him at odds with many of his peers at big coal-fired utilities like Duke Energy and American Electric Power that emit the most carbon. These companies signed on in the expectation that the allowances would be handed out at no charge. But economically, that is the same as selling them and giving the money to businesses -- i.e., as subsidies and corporate welfare. Mr. Leonard uses more diplomatic language: "Everybody's got their kind of own self-interest out there that they're tending to promote, once you get behind it."

It would be fair here to note Entergy's own self-interest: Only about 7% of its portfolio is coal, and the nuclear industry stands to benefit as much as any "green" business from a carbon crackdown. Then again, if Congress does create cap and trade, expect the next populist outcry to be for a windfall profits tax on nuclear.

Mr. Leonard acknowledges, though, that coal and other energy companies -- and their customers -- have legitimate reasons to worry about cap and trade: "No utility CEO likes to raise rates, and that's what would happen. Your rates go up no matter what," he says. And even if the government returns every dime of climate revenues to ratepayers, "That's a painful thing for utilities to have to endure, because angriness comes toward you, and somebody else gets the goodwill." Giving out the allowances, he does concede, could help the cushion the blow.

On pure economic grounds, Mr. Leonard seems to prefer a straight carbon tax, which would be simpler and more efficient than cap and trade. But he also notes that "the political will to go the tax route . . . is just not there. Nonexistent" -- namely because the use of the word "tax." The key, he says, is to design a cap-and-trade program that will "simulate the same thing a tax would do." That is, to achieve the increased energy prices essential to the success of cap and trade.

Mr. Leonard does evince a certain . . . uneasiness with the direction of climate politics. "The old adage of 'think globally, act locally' -- it still works," he says. "But with climate change, for it to really be effective, we have to take that thought much more completely and much more deeply than probably we've ever really thought about an issue."

He notes China's breakneck construction of conventional coal plants. China has already surpassed U.S. coal capacity and is on pace to double it sometime in the middle of the next decade. The U.S., he says, could close down every single coal plant immediately and that would be "working to a global solution, acting locally. But that wouldn't do much good in the scheme of things," because atmospheric CO2 concentrations would continue to rise as China continues to expand.

"We go to zero emissions in this country, and if China doesn't follow us, we're nowhere. . . . We've just ruined our economy, and we're nowhere," Mr. Leonard says. "We make mistakes here," meaning a poorly designed carbon system, "and we have a real problem." He goes on, "We talk about that we should lead, then people will follow, but that's kind of" -- he pauses -- "silly. China's not going to follow us because we're the United States. . . . You say, 'Shut down your plants' -- well, that's going to be a short conversation. They've got $2 trillion invested in their plants and they still aren't feeding all their people." He adds that "If we were China, we wouldn't shut our plants down either."

Mr. Leonard argues that the best way to square these circles is to channel U.S. basic research dollars into the technology that can retrofit existing coal plants with carbon capture technology. Most current funding is devoted to second-generation systems that are still 10 or 20 years away from commercial deployment, at best. "We should spend 99% of our time on the problem that we have today, and it ain't going away," he says, referring to coal emissions. He also sees retrofit technology as a realistic way to curb Chinese emissions: "They're going to follow because we can offer them something."

Mr. Leonard worries, too, that Congress may make matters worse as it takes up climate change legislation this spring or summer. One proposal that enjoys wide Democratic support is a "renewable portfolio standard," which would mandate that utilities generate a certain percentage of their electricity -- as high as 20% -- from renewable sources like wind or solar. Nuclear, naturally, does not qualify.

Mr. Leonard points to yet another energy policy contradiction, which is that a portfolio standard -- which Congress would impose on top of cap and trade -- would actually increase carbon emissions. Power companies would be more likely to use renewables to replace sources like natural gas, which is relatively lower in carbon but also expensive, rather than to displace coal, which is cheaper and more abundant but also produces more emissions.

While Mr. Leonard says -- repeatedly -- that Entergy has nothing against solar or wind, "Our view is that government shouldn't be in the business of picking technologies. . . . And we're moving down a path where we're mandating renewables instead of a price signal to do it. We're . . . moving toward a planned economy by mandating a technology. Well, if we're a planned economy, if we're mandating technologies, then we don't have a whole plan."

"The focus," Mr. Leonard reiterates, "should be on developing the cap-and-trade program: Setting the amount of reductions, where we want to be, setting the price signal that works so that it's not so high that it shuts down coal plants prematurely, and that's not so low that it becomes a loophole and people don't end up doing anything -- and all we end up doing is taxing people, and God knows what the government will do with that money."

"This needs to be done with a fine pen to get it right," he adds.

Still, the government is not exactly run by omniscient technocrats. Does he believe that Congress -- with its entrenched constituencies, its own self-interest, its many antibusiness biases -- can actually create a climate system that is as sensitive and efficient as he envisions? That is, can the political class actually write the same bill that economists would write?

"That is really the tough part," Mr. Leonard says. "The trade-offs are not simple. . . . With a well-crafted bill, the market will make those choices. Or you can do it with a planned economy, and hope you get it right."

The answer to this riddle use to be: 47, one to change the bulb and 46 to write the impact statement.

March 30, 2009How many environmentalists does it take to change a light bulb?

Ethel C. FenigHow many pretentious, earth hating, fear mongering Al Gore acolytes does it take to screw in an expensive, difficult to use, harsh, erratic and often dangerous light bulb? So many that the ever shrinking New York Times wasted valuable earth insensitive ink and destroyed trees for paper to print two articles last Friday discussing the issue. They also conveniently placed them online.

One article seriously asked "Do New Bulbs Save Energy If They Don't Work?" Duh!! Ok, wise New York Times readers, the answer is no--and they also waste money because frustrated users will resort to candles, thereby depleting oxygen and increasing the danger of fire. However, in all fairness, the paper felt compelled to ask the question because

a lot of people these days are finding the new compact fluorescent bulbs anything but simple. Consumers who are trying them say they sometimes fail to work, or wear out early. At best, people discover that using the bulbs requires learning a long list of dos and don'ts. (snip) Consumers are posting vociferous complaints on the Internet after trying the bulbs and finding them lacking.

Yes, indeed, in these complicated times no more simply buying a light bulb, screwing it in and turning on the switch. Now, in the ultimate how many (fill in the blank) does it take to screw in a light bulb joke, today's bulbs require a college graduate reading ability to interpret the warnings and instructions that accompany each bulb; the extensive written material often requires more elaborate packing with more earth unfriendly--according to environmentalists--plastic and cardboard. And so, in a second article, helpfully titled "Tips for Using Compact Fluorescent Bulbs," the NY Times distills the collected compact fluorescent bulb wisdom from Rensselaer Polytechnic Institute's Lighting Research Center, Consumer Reports, and the government (your) tax supported Energy Star program and the Environmental Protection Agency. Yep, all these institutions--and more--are needed to teach the average citizen how to use the new energy saving bulbs.

One handy tip: These so called environmentally friendly light bulbs can be extremely damaging to your health ; they contain mercury, a dangerous substance for humans.

If you break a bulb, the Environmental Protection Agency recommends precautions to avoid mercury exposure: Clear people and pets from the room and open a window for at least 15 minutes if possible. Avoid vacuuming. Scoop up larger pieces with stiff paper or cardboard, pick up smaller residue with sticky tape, and wipe the area with a damp cloth. Put everything into a sealed plastic bag or sealed glass jar. In most cases, this can be put in the trash, but the E.P.A. recommends checking local rules.

So keep those nasty plastic bags handy. Or stock up and use regular incandescent bulbs. In the long run they just might be cheaper. And safer. And more environmentally friendly.

Marc SheppardYesterday, a genuine bi-partisan coalition (twenty-six Democrats and forty-one Republicans) denied cap-and-trade legislation a filibuster-and-amendment-proof path through the Senate. The move effectively prevents overzealous Senators the likes of Boxer and Waxman from turning their paranoid green dreams of citizen-control into law by circumventing Senate procedures.

And while I probably wouldn’t have your eyes on loan if you thought that anything less than good news – it’s actually nothing short of tremendous news.

You see, as recently as Tuesday it appeared the climate-hysterics might succeed in attaching their dreadful stealth national sales tax scheme to the budget resolution by employing a sneaky little trick called the reconciliation process. But yesterday’s passage of an amendment put forth by freshman Senator Mike Johanns (R-Neb) forces the green ideologues to muster 60 votes instead of a simple majority to pass their inane plan. And, given yesterday’s clear message sent via vote by Democrats from home-states most overwhelmed by the financial disintegration this legislation would assure, such, thankfully, won’t be an easy task.

After all, did over two dozen Democrats suddenly have a moment of group clarity and grasp the madness of raising every American’s energy costs by thousands of dollars annually in a futile and meaningless attempt to diminish atmospheric levels of CO2? Have the decade-long cessation of warming, or the almost daily news of yet another climate expert concurring that the minuscule levels of this trace gas mankind might influence has no bearing on climate whatsoever, finally sunk in? Were the trickle-down consequences of an abrupt $2 Trillion expense to industry and utility companies debated more clearly yesterday than they had been hitherto?

Not likely. Smart money would instead be on a lack of cohesion within the Congressional Green Caucus. And why not? The latest Gallup Poll reports that 41% of Americans consider global warming an exaggeration. And a January Rasmussen poll found 44% percent believing that "long-term planetary trends are the cause of global warming.” So one must wonder -- what percentage of Senate and House Democrats remain true believers as opposed to those dutifully following party orthodoxy? And just how far will they be willing to stick their necks out to abide those tenets?

The numbers would appear to favor the sane.

Last year’s Lieberman-Warner Climate Security Act of 2008 was tabled without finding even a simple majority, let alone the required 60 votes. And 7 of the 48 Senators voting aye were Republicans. 4 of those 7 (Dole, Smith, Sununu and Warner) are gone. Of the three power-RINOs (PRs), Specter abstained while only Collins and Snowe did what Collins and Snowe typically do.

Furthermore, the 650 page draft of the American Clean Energy and Security Act of 2009 [PDF], which actually trumps both Obama’s proposals and Lieberman-Warner in its draconian progress penalization, has virtually no GOP support. None. Not even among the three PRs.

But even should all three be once again tempted by some earmarked snake, the Dems must limit the number of their ranks shuffling across the aisle to one, and that’s not likely. 4 Senate Democrats voted against Lieberman-Warner last year. And 26 risked the wild wrath of Barbara “There Will Be Flood” Boxer -- who desperately attempted to block the Johanns amendment with one of her own – yesterday to assure the appropriate 60% vote condition. And one -- Louisiana’s Mary Landrieu -- was even wise enough to do both.

Word has it Boxer flipped out after the vote. And who can blame her? Her baby is drowning in the cooling, stable-leveled Sea the locals call Reality.

Indeed, the Senate eco-maniacs appear to be losing their grip -- in more ways than one. And after their cap-and-trade con-job officially nose-dives this year, it may well be headed to the dustbin of dreadful ideas it belongs in for the foreseeable future. And the serene sanity of that decision, in turn, may just bridle our emissaries at the Battle of Copenhagen come December.

The same sort of lame idealism and science massaged for a political end that brought us this now has free rein in the executive branch:

Report: Ethanol raises cost of nutrition programs

By MARY CLARE JALONICK, Thu Apr 9, 10:02 pm ET

WASHINGTON – The increased use of ethanol could cost the government up to $900 million for food stamps and child nutrition programs, a congressional report says.Higher use of the corn-based fuel additive accounted for about 10 percent to 15 percent of the rise in food prices between April 2007 and April 2008, according to the nonpartisan Congressional Budget Office. That translates into higher costs for food programs for the needy.

The CBO said other factors, such as skyrocketing energy costs, had an even greater impact than ethanol on food prices during that period. Economists there estimate that increased costs for food programs overall due to higher food prices will be about $5.3 billion in the current budget year.

Ethanol's impact on future food prices is uncertain, the report says, because an increased supply of corn has the potential to eventually lower food prices.

Roughly one quarter of corn grown in the United States is now used to produce ethanol, and overall consumption of ethanol in the country hit a record high last year, exceeding 9 billion gallons, according to the CBO. Nearly 3 billion bushels of corn were used to produce ethanol in the United States last year — an increase of almost a billion bushels over 2007.The demand for ethanol was one factor that increased corn prices, leading to higher animal feed and ingredient costs for farmers, ranchers and food manufacturers. Some of that cost is eventually passed on to consumers, since corn is used in so many food products.

Several of those affected groups have banded together to oppose tax breaks and federal mandates for the fuel. They said Thursday that the report shows the unintended consequences of ethanol.

"As startling as these figures are, they do not even tell the story of the toll higher food prices have taken on working families, nor the impact higher feed prices have had on farmers in animal agriculture who have seen staggering losses and job cuts and liquidation of livestock herds," the Grocery Manufacturers Association, American Meat Institute, National Turkey Federation and National Council of Chain Restaurants said in a statement.

Supporters of ethanol disagreed, saying the report was good news.

"The report released by the Congressional Budget Office confirms what we've known for some time: The impact of ethanol production on food prices is minimal and that energy was the main driver in the rise of food prices," said Tom Buis, CEO of Growth Energy, an ethanol industry group.

Ethanol producers asked the Environmental Protection Agency last month to increase the amount of ethanol that refiners can blend with gasoline from a maximum of 10 percent to 15 percent, which could boost the demand for ethanol by as much as 6 billion gallons a year. They said raising that cap would create thousands of new jobs.

Agriculture Secretary Tom Vilsack has said he believes the administration could move quickly to raise the cap to at least 12 or 13 percent, but the EPA has not yet made a final decision.

The report also looked at ethanol's effects on greenhouse gas emissions, acknowledging that over time ethanol's benefits over gasoline could diminish. The report says the use of ethanol reduced gasoline consumption by about 4 percent last year and reduced the gases blamed for global warming from the burning of gasoline by less than 1 percent. But the clearing of cropland and forests to produce more ethanol could more than offset those reductions.

The SunZia transmission line that would link sun and wind power from central New Mexico with cities in Arizona is just the sort of energy project an environmentalist could love -- or hate. And it is just the sort of line the Interior Department has been tasked with promoting -- or guarding against.

If built, the 460-mile line would carry about 3,000 megawatts of power, enough to avoid the need for a handful of coal-fired plants and to help utilities meet mandated targets for use of renewable fuel. "We have to connect the sun of the deserts and the winds of the plains to places where people live," Interior Secretary Ken Salazar said recently.

But the line would also cross grasslands, skirt two national wildlife refuges and traverse the Rio Grande, all habitat areas rich in wildlife. The graceful sandhill crane, for example, makes its winter home in the wetlands of New Mexico's Bosque del Apache National Wildlife Refuge, right next to the path of the proposed power line. And much of the area falls under the protection of the Interior Department's Bureau of Land Management (BLM).

Renewable-energy development, which the Obama administration has made a priority, is posing conflicts between economic interests and environmental concerns, not entirely unlike the way offshore oil and gas development pits economics against environment. But because of concerns about climate, many environmentalists and government agencies could find themselves straddling both sides, especially in Western states where the federal government is a major landowner.

"Everybody in New Mexico loves the sandhill cranes," said Ned Farquhar, a former aide to New Mexico Gov. Bill Richardson (D). "We also love our renewable energy. So we have to figure this out."

Farquhar made that comment a month ago when he was working for the Natural Resources Defense Council. Since then, he has been appointed head of the BLM -- in charge of figuring it out.

As the push for renewable-energy development intensifies across the United States, scientists and activists have begun to voice concern that policymakers have underestimated the environmental impact of projects that are otherwise "green."

"There is no free lunch when it comes to meeting our energy needs," said Johanna Wald, a senior lawyer at the Natural Resources Defense Council. She added, however, that the renewables boom "offers a chance to do it right."

"We want to do it differently compared to how we did oil and gas development," she said.

There is no question that permit applications for renewable-energy projects are on the rise, especially on federal land in the West. According to Ray Brady, leader of the BLM's energy policy team, the bureau has received 199 applications for solar projects encompassing 1.7 million acres of land, though only two of them have undergone environmental assessments.

The agency has already authorized 206 wind projects -- 28 of them to generate power, the rest primarily to test a region's wind-generation capacity -- and at least 200 more are awaiting approval.

The fact that eight Western states have established "renewable portfolio standards" has accelerated the push for new projects, Brady said, because those policies are forcing utilities to find additional renewable sources of electricity.

"For all of these reasons, BLM does have a challenge because of the additional work involved," said Brady, who predicted that the agency may hire as many as 100 people just to work on renewable-energy permits. "Clearly there's an interest in expediting and streamlining the process. However, we need to make the right decisions that are based on the best science."

One of the biggest challenges renewable-energy projects pose is that they often take up much more land than conventional sources, such as coal-fired power plants. A team of scientists, several of whom work for the Nature Conservancy, has written a paper that will appear in the journal PLoS One showing that it can take 300 times as much land to produce a given amount of energy from soy biodiesel as from a nuclear power plant. Regardless of the climate policy the nation adopts, the paper predicts that by 2030, energy production will occupy an additional 79,537 square miles of land.

The impact will be "substantial," said Jimmie Powell, the Nature Conservancy's national energy leader and one of the paper's co-authors. "It's important to know where the footprint is going to be."

In some cases, scientists are just beginning to discover the unintended effect of projects such as wind turbines. Grassland birds such as the lesser prairie chicken and the greater sage grouse, both of which are candidates for listing under the Endangered Species Act, appear to avoid vertical structures such as wind turbines and transmission-line towers. This is proving to be a problem in states such as Kansas, an ideal site for wind power, because as more turbines are built, lesser prairie chickens will confine themselves to narrow ranges, fragmenting a population that must be connected to survive.

"Nobody knows what's in the bird's head, but presumably there's an inherited behavior that allows the birds to avoid avian predators who could perch overhead," said Michael Bean, wildlife director for the Environmental Defense Fund, an advocacy group.

The U.S. Fish and Wildlife Service has proposed requiring that developers keep wind turbines at least five miles away from a prairie grouse lek, or mating area, but the wind industry has resisted this idea.

Ditlev Engel, president and chief executive of the Danish wind-energy company Vestas, said anecdotal evidence about birds being caught in turbine blades and other environmental horror stories do not usually hold up under scrutiny.

"Do people think it's better all those birds are breathing CO2? I'm not a scientist, but I doubt it," said Engel, whose company is expanding its U.S. manufacturing and distribution operations. "Let's get the facts on the table and not the feelings. The fact is, these are not issues."

In many instances, producers of renewable energy are coordinating with environmental groups and federal agencies to try to map out the best locations for energy production, whether in the West or offshore. The Natural Resources Defense Council and the National Audubon Society have created an online mapping project, using Google Earth, of 13 Western states to show where renewable projects would have the most impact. Out of the 860 million acres in those states, for example, there are 10,000 conservation areas, and 128 million acres are off limits to energy development.

In the case of SunZia, the company has been working to minimize the impact of its proposed transmission line. Tom Wray, manager of generation and transmission projects, said that as much as 80 percent of the line's path would parallel existing lines. He said that it would cross the Rio Grande north of the sandhill crane's flyway and that it would zig and zag to skirt environmentally sensitive areas. Every mile added to the length of the line, however, would add about $1 million to the project.

"We're not aware of any threatened or endangered species habitat or impact issues that we can't mitigate or deal with," Wray said.

Lawrence A. Selzer, president of the Conservation Fund, said the new administration is eager to advance these projects without alienating environmentalists. "The answer from President Obama can't be no," he said. "They've got to find a way to say yes."

Like medieval priests, today’s carbon brokers will sell you an indulgence that forgives your carbon sins. It will run you about $500 for 5 tons of forgiveness—about how much the typical American needs every year. Or about $2,000 a year for a typical four-person household. Your broker will spend the money on such things as reducing methane emissions from hog farms in Brazil.

But if you really want to make a difference, you must send a check large enough to forgive the carbon emitted by four poor Brazilian households, too—because they’re not going to do it themselves. To cover all five households, then, send $4,000. And you probably forgot to send in a check last year, and you might forget again in the future, so you’d best make it an even $40,000, to take care of a decade right now. If you decline to write your own check while insisting that to save the world we must ditch the carbon, you are just burdening your already sooty soul with another ton of self-righteous hypocrisy. And you can’t possibly afford what it will cost to forgive that.

If making carbon this personal seems rude, then think globally instead. During the presidential race, Barack Obama was heard to remark that he would bankrupt the coal industry. No one can doubt Washington’s power to bankrupt almost anything—in the United States. But China is adding 100 gigawatts of coal-fired electrical capacity a year. That’s another whole United States’ worth of coal consumption added every three years, with no stopping point in sight. Much of the rest of the developing world is on a similar path.

Cut to the chase. We rich people can’t stop the world’s 5 billion poor people from burning the couple of trillion tons of cheap carbon that they have within easy reach. We can’t even make any durable dent in global emissions—because emissions from the developing world are growing too fast, because the other 80 percent of humanity desperately needs cheap energy, and because we and they are now part of the same global economy. What we can do, if we’re foolish enough, is let carbon worries send our jobs and industries to their shores, making them grow even faster, and their carbon emissions faster still.

We don’t control the global supply of carbon.

Ten countries ruled by nasty people control 80 percent of the planet’s oil reserves—about 1 trillion barrels, currently worth about $40 trillion. If $40 trillion worth of gold were located where most of the oil is, one could only scoff at any suggestion that we might somehow persuade the nasty people to leave the wealth buried. They can lift most of their oil at a cost well under $10 a barrel. They will drill. They will pump. And they will find buyers. Oil is all they’ve got.

Poor countries all around the planet are sitting on a second, even bigger source of carbon—almost a trillion tons of cheap, easily accessible coal. They also control most of the planet’s third great carbon reservoir—the rain forests and soil. They will keep squeezing the carbon out of cheap coal, and cheap forest, and cheap soil, because that’s all they’ve got. Unless they can find something even cheaper. But they won’t—not any time in the foreseeable future.

We no longer control the demand for carbon, either. The 5 billion poor—the other 80 percent—are already the main problem, not us. Collectively, they emit 20 percent more greenhouse gas than we do. We burn a lot more carbon individually, but they have a lot more children. Their fecundity has eclipsed our gluttony, and the gap is now widening fast. China, not the United States, is now the planet’s largest emitter. Brazil, India, Indonesia, South Africa, and others are in hot pursuit. And these countries have all made it clear that they aren’t interested in spending what money they have on low-carb diets. It is idle to argue, as some have done, that global warming can be solved—decades hence—at a cost of 1 to 2 percent of the global economy. Eighty percent of the global population hasn’t signed on to pay more than 0 percent.

Accepting this last, self-evident fact, the Kyoto Protocol divides the world into two groups. The roughly 1.2 billion citizens of industrialized countries are expected to reduce their emissions. The other 5 billion—including both China and India, each of which is about as populous as the entire Organisation for Economic Co-operation and Development—aren’t. These numbers alone guarantee that humanity isn’t going to reduce global emissions at any point in the foreseeable future—unless it does it the old-fashioned way, by getting poorer. But the current recession won’t last forever, and the long-term trend is clear. Their populations and per-capita emissions are rising far faster than ours could fall under any remotely plausible carbon-reduction scheme.

Might we simply buy their cooperation? Various plans have circulated for having the rich pay the poor to stop burning down rain forests and to lower greenhouse-gas emissions from primitive agricultural practices. But taking control of what belongs to someone else ultimately means buying it. Over the long term, we would in effect have to buy up a large fraction of all the world’s forests, soil, coal, and oil—and then post guards to make sure that poor people didn’t sneak in and grab all the carbon anyway. Buying off people just doesn’t fly when they outnumber you four to one.

Might we instead manage to give the world something cheaper than carbon? The moon-shot law of economics says yes, of course we can. If we just put our minds to it, it will happen. Atom bomb, moon landing, ultracheap energy—all it takes is a triumph of political will.

Really? For the very poorest, this would mean beating the price of the free rain forest that they burn down to clear land to plant a subsistence crop. For the slightly less poor, it would mean beating the price of coal used to generate electricity at under 3 cents per kilowatt-hour.

And with one important exception, which we will return to shortly, no carbon-free fuel or technology comes remotely close to being able to do that. Fossil fuels are extremely cheap because geological forces happen to have created large deposits of these dense forms of energy in accessible places. Find a mountain of coal, and you can just shovel gargantuan amounts of energy into the boxcars.

Shoveling wind and sun is much, much harder. Windmills are now 50-story skyscrapers. Yet one windmill generates a piddling 2 to 3 megawatts. A jumbo jet needs 100 megawatts to get off the ground; Google is building 100-megawatt server farms. Meeting New York City’s total energy demand would require 13,000 of those skyscrapers spinning at top speed, which would require scattering about 50,000 of them across the state, to make sure that you always hit enough windy spots. To answer the howls of green protest that inevitably greet realistic engineering estimates like these, note that real-world systems must be able to meet peak, not average, demand; that reserve margins are essential; and that converting electric power into liquid or gaseous fuels to power the existing transportation and heating systems would entail substantial losses. What was Mayor Bloomberg thinking when he suggested that he might just tuck windmills into Manhattan? Such thoughts betray a deep ignorance about how difficult it is to get a lot of energy out of sources as thin and dilute as wind and sun.

It’s often suggested that technology improvements and mass production will sharply lower the cost of wind and solar. But engineers have pursued these technologies for decades, and while costs of some components have fallen, there is no serious prospect of costs plummeting and performance soaring as they have in our laptops and cell phones. When you replace conventional with renewable energy, everything gets bigger, not smaller—and bigger costs more, not less. Even if solar cells themselves were free, solar power would remain very expensive because of the huge structures and support systems required to extract large amounts of electricity from a source so weak that it takes hours to deliver a tan.

This is why the (few) greens ready to accept engineering and economic reality have suddenly emerged as avid proponents of nuclear power. In the aftermath of the Three Mile Island accident—which didn’t harm anyone, and wouldn’t even have damaged the reactor core if the operators had simply kept their hands off the switches and let the automatic safety systems do their job—ostensibly green antinuclear activists unwittingly boosted U.S. coal consumption by about 400 million tons per year. The United States would be in compliance with the Kyoto Protocol today if we could simply undo their handiwork and conjure back into existence the nuclear plants that were in the pipeline in nuclear power’s heyday. Nuclear power is fantastically compact, and—as America’s nuclear navy, several commercial U.S. operators, France, Japan, and a handful of other countries have convincingly established—it’s both safe and cheap wherever engineers are allowed to get on with it.

But getting on with it briskly is essential, because costs hinge on the huge, up-front capital investment in the power plant. Years of delay between the capital investment and when it starts earning a return are ruinous. Most of the developed world has made nuclear power unaffordable by surrounding it with a regulatory process so sluggish and unpredictable that no one will pour a couple of billion dollars into a new plant, for the good reason that no one knows when (or even if) the investment will be allowed to start making money.

And countries that don’t trust nuclear power on their own soil must hesitate to share the technology with countries where you never know who will be in charge next year, or what he might decide to do with his nuclear toys. So much for the possibility that cheap nuclear power might replace carbon-spewing sources of energy in the developing world. Moreover, even India and China, which have mastered nuclear technologies, are deploying far more new coal capacity.

Remember, finally, that most of the cost of carbon-based energy resides not in the fuels but in the gigantic infrastructure of furnaces, turbines, and engines. Those costs are sunk, which means that carbon-free alternatives—with their own huge, attendant, front-end capital costs—must be cheap enough to beat carbon fuels that already have their infrastructure in place. That won’t happen in our lifetimes.

Another argument commonly advanced is that getting over carbon will, nevertheless, be comparatively cheap, because it will get us over oil, too—which will impoverish our enemies and save us a bundle at the Pentagon and the Department of Homeland Security. But uranium aside, the most economical substitute for oil is, in fact, electricity generated with coal. Cheap coal-fired electricity has been, is, and will continue to be a substitute for oil, or a substitute for natural gas, which can in turn substitute for oil. By sharply boosting the cost of coal electricity, the war on carbon will make us more dependent on oil, not less.

The first place where coal displaces oil is in the electric power plant itself. When oil prices spiked in the early 1980s, U.S. utilities quickly switched to other fuels, with coal leading the pack; the coal-fired plants now being built in China, India, and other developing countries are displacing diesel generators. More power plants burning coal to produce cheap electricity can also mean less natural gas used to generate electricity. And less used for industrial, commercial, and residential heating, welding, and chemical processing, as these users switch to electrically powered alternatives. The gas that’s freed up this way can then substitute for diesel fuel in heavy trucks, delivery vehicles, and buses. And coal-fired electricity will eventually begin displacing gasoline, too, as soon as plug-in hybrid cars start recharging their batteries directly from the grid.

To top it all, using electricity generated in large part by coal to power our passenger cars would lower carbon emissions—even in Indiana, which generates 75 percent of its electricity with coal. Big power plants are so much more efficient than the gasoline engines in our cars that a plug-in hybrid car running on electricity supplied by Indiana’s current grid still ends up more carbon-frugal than comparable cars burning gasoline in a conventional engine under the hood. Old-guard energy types have been saying this for decades. In a major report released last March, the World Wildlife Fund finally concluded that they were right all along.

But true carbon zealots won’t settle for modest reductions in carbon emissions when fat targets beckon. They see coal-fired electricity as the dragon to slay first. Huge, stationary sources can’t run or hide, and the cost of doing without them doesn’t get rung up in plain view at the gas pump. California, Pennsylvania, and other greener-than-thou states have made flatlining electricity consumption the linchpin of their war on carbon. That is the one certain way to halt the displacement of foreign oil by cheap, domestic electricity.

The oil-coal economics come down to this. Per unit of energy delivered, coal costs about one-fifth as much as oil—but contains one-third more carbon. High carbon taxes (or tradable permits, or any other economic equivalent) sharply narrow the price gap between oil and the one fuel that can displace it worldwide, here and now. The oil nasties will celebrate the green war on carbon as enthusiastically as the coal industry celebrated the green war on uranium 30 years ago.

The other 5 billion are too poor to deny these economic realities. For them, the price to beat is 3-cent coal-fired electricity. China and India won’t trade 3-cent coal for 15-cent wind or 30-cent solar. As for us, if we embrace those economically frivolous alternatives on our own, we will certainly end up doing more harm than good.

Sorry it didn't fit in one post. This is very important information. Please read the previous post first although the first paragraph here will tell you why cap and trade won't work. (Crafty, please explain your objection to nuclear power when you have time.)------------------

By pouring money into anything-but-carbon fuels, we will lower demand for carbon, making it even cheaper for the rest of the world to buy and burn. The rest will use cheaper energy to accelerate their own economic growth. Jobs will go where energy is cheap, just as they go where labor is cheap. Manufacturing and heavy industry require a great deal of energy, and in a global economy, no competitor can survive while paying substantially more for an essential input. The carbon police acknowledge the problem and talk vaguely of using tariffs and such to address it. But carbon is far too deeply embedded in the global economy, and materials, goods, and services move and intermingle far too freely, for the customs agents to track.

Consider your next Google search. As noted in a recent article in Harper’s, “Google . . . and its rivals now head abroad for cheaper, often dirtier power.” Google itself (the “don’t be evil” company) is looking to set up one of its electrically voracious server farms at a site in Lithuania, “disingenuously described as being near a hydroelectric dam.” But Lithuania’s grid is 0.5 percent hydroelectric and 78 percent nuclear. Perhaps the company’s next huge farm will be “near” the Three Gorges Dam in China, built to generate over three times as much power as our own Grand Coulee Dam in Washington State. China will be happy to play along, while it quietly plugs another coal plant into its grid a few pylons down the line. All the while, of course, Google will maintain its low-energy headquarters in California, a state that often boasts of the wise regulatory policies—centered, one is told, on efficiency and conservation—that have made it such a frugal energy user. But in fact, sky-high prices have played the key role, curbing internal demand and propelling the flight from California of power plants, heavy industries, chip fabs, server farms, and much else (see “California’s Potemkin Environmentalism,” Spring 2008).

So the suggestion that we can lift ourselves out of the economic doldrums by spending lavishly on exceptionally expensive new sources of energy is absurd. “Green jobs” means Americans paying other Americans to chase carbon while the rest of the world builds new power plants and factories. And the environmental consequences of outsourcing jobs, industries, and carbon to developing countries are beyond dispute. They use energy far less efficiently than we do, and they remain almost completely oblivious to environmental impacts, just as we were in our own first century of industrialization. A massive transfer of carbon, industry, and jobs from us to them will raise carbon emissions, not lower them.

The grand theory for how the developed world can unilaterally save the planet seems to run like this. We buy time for the planet by rapidly slashing our own emissions. We do so by developing carbon-free alternatives even cheaper than carbon. The rest of the world will then quickly adopt these alternatives, leaving most of its trillion barrels of oil and trillion tons of coal safely buried, most of the rain forests standing, and most of the planet’s carbon-rich soil undisturbed. From end to end, however, this vision strains credulity.

Perhaps it’s the recognition of that inconvenient truth that has made the anti-carbon rhetoric increasingly apocalyptic. Coal trains have been analogized to boxcars headed for Auschwitz. There is talk of the extinction of all humanity. But then, we have heard such things before. It is indeed quite routine, in environmental discourse, to frame choices as involving potentially infinite costs on the green side of the ledger. If they really are infinite, no reasonable person can quibble about spending mere billions, or even trillions, on the dollar side, to dodge the apocalyptic bullet.

Thirty years ago, the case against nuclear power was framed as the “Zero-Infinity Dilemma.” The risks of a meltdown might be vanishingly small, but if it happened, the costs would be infinitely large, so we should forget about uranium. Computer models demonstrated that meltdowns were highly unlikely and that the costs of a meltdown, should one occur, would be manageable—but greens scoffed: huge computer models couldn’t be trusted. So we ended up burning much more coal. The software shoe is on the other foot now; the machines that said nukes wouldn’t melt now say that the ice caps will. Warming skeptics scoff in turn, and can quite plausibly argue that a planet is harder to model than a nuclear reactor. But that’s a detail. From a rhetorical perspective, any claim that the infinite, the apocalypse, or the Almighty supports your side of the argument shuts down all further discussion.

To judge by actions rather than words, however, few people and almost no national governments actually believe in the infinite rewards of exorcising carbon from economic life. Kyoto has hurt the anti-carbon mission far more than carbon zealots seem to grasp. It has proved only that with carbon, governments will say and sign anything—and then do less than nothing. The United States should steer well clear of such treaties because they are unenforceable, routinely ignored, and therefore worthless.

If we’re truly worried about carbon, we must instead approach it as if the emissions originated in an annual eruption of Mount Krakatoa. Don’t try to persuade the volcano to sign a treaty promising to stop. Focus instead on what might be done to protect and promote the planet’s carbon sinks—the systems that suck carbon back out of the air and bury it. Green plants currently pump 15 to 20 times as much carbon out of the atmosphere as humanity releases into it—that’s the pump that put all that carbon underground in the first place, millions of years ago. At present, almost all of that plant-captured carbon is released back into the atmosphere within a year or so by animal consumers. North America, however, is currently sinking almost two-thirds of its carbon emissions back into prairies and forests that were originally leveled in the 1800s but are now recovering. For the next 50 years or so, we should focus on promoting better land use and reforestation worldwide. Beyond that, weather and the oceans naturally sink about one-fifth of total fossil-fuel emissions. We should also investigate large-scale options for accelerating the process of ocean sequestration.

Carbon zealots despise carbon-sinking schemes because, they insist, nobody can be sure that the sunk carbon will stay sunk. Yet everything they propose hinges on the assumption that carbon already sunk by nature in what are now hugely valuable deposits of oil and coal can be kept sunk by treaty and imaginary cheaper-than-carbon alternatives. This, yet again, gets things backward. We certainly know how to improve agriculture to protect soil, and how to grow new trees, and how to maintain existing forests, and we can almost certainly learn how to mummify carbon and bury it back in the earth or the depths of the oceans, in ways that neither man nor nature will disturb. It’s keeping nature’s black gold sequestered from humanity that’s impossible.

If we do need to do something serious about carbon, the sequestration of carbon after it’s burned is the one approach that accepts the growth of carbon emissions as an inescapable fact of the twenty-first century. And it’s the one approach that the rest of the world can embrace, too, here and now, because it begins with improving land use, which can lead directly and quickly to greater prosperity. If, on the other hand, we persist in building green bridges to nowhere, we will make things worse, not better. Good intentions aren’t enough. Turned into ineffectual action, they can cost the earth and accelerate its ruin at the same time.

I posted recently Peter Huber's logic of why cap and trade legislation won't reduce carbon emissions on earth. I was reading some of his older writings and note that he predicted the following about 2 years ago:

"If you're 40 or older, you're going to spend the rest of your life powered by carbon or uranium. Take your pick. Forget about "none of the above" or "less of both." For the next several decades at least, alternative energy sources aren't serious choices; they are pork barrels, delusions, demonstration plants and daydreams."

---If you are going to plug in our vehicles someday for cheaper power and lower oil consumption, we are going to need more electricity on the grid. For the most part that will be coal or nuclear. One is a heavy carbon emitter. One is carbon-free, compact, cheap, safe and clean. You make the call!

By Richard Henry LeeIt was a squirrel, a labor group and an environmental group along with California's tough environmental regulations, which helped kill a hybrid solar power plant project for a Mojave Desert city.

It seemed like a good idea at the time. The City of Victorville prides itself on being a green city. They recently bought a number of hybrid vehicles for their city fleet. And they are located in the Mojave Desert which receives large amounts of sunshine every year.

When California Governor, Arnold Schwarzenegger (R), signed legislation that requires a portion of additional electric power generation to be sustainable, the City proposed a hybrid solar electric power plant. The plant would combine a solar thermal powered system along with a natural gas fired system.

After much fanfare at the start, the project began to run into problems during the permitting phase. The California Environmental Quality Act (CEQA) imposes a strict review process. The California Energy Commission (CEC) is the state agency that conducts the environmental review.

The first problem was the squirrel, or more specifically, the Mohave ground squirrel, which is considered to be threatened. While the squirrel has never been found at the project site, nor was there any evidence it had ever lived there, it could decide sometime in the future to live there. As a result, the California Department of Fish and Game decided that the squirrel required a mitigation ratio of 3:1. This means that 3 acres of the desert needs to be purchased and set aside for the squirrel for every acre of project site. This increased costs dramatically since there were few parcels available for set aside.

Next was the labor union group called CURE, which is an acronym for California Unions for Reliable Energy. CURE is supported by various construction unions. It has a history of fighting new projects in California unless the applicant agrees to use union labor for the project.

In February 2008, the Sacramento Bee editorialized:

Labor unions are an even larger abuser of CEQA. In recent years, labor groups have used environmental lawsuits, or the threat of such suits, to stop or slow down power plant construction, hospital expansions and housing developments. The unions' lawyers always seem to disappear once a developer has signed an agreement to hire only union labor...

For several years, a group called California Unions for Reliable Energy has used CEQA to slow or block power plants, including a geothermal plant in Imperial County. As it happens, CURE employs a law firm founded by Tom Adams, the current president of the California League of Conservation Voters.

CURE petitioned the CEC to become an intervenor in the review process and it was granted. CURE then began to request a lengthy data request of 152 items about the project. For example, they inquired "whether the City would implement a noxious weed preventive program"

When the CEC finally ruled against the various objections that CURE raised, the labor group then filed suit against the local air quality district in Superior Court which eventually ruled against CURE.

Then the Natural Resources Defense Council gets involved. The City tried to purchase pollution credits from the Los Angeles air basin for the natural gas portion of the plant since there were not enough local credits for purchase. But the NRDC filed suit against the purchase and prevailed. The NRDC bills itself at "The Earth's Best Defense".

The delays and burdensome requirements were costly to the City. For a while they tried to sell the project, but there were no buyers. Finally, the City ran into cash flow problems and could not pay General Electric for the steam turbines for the plant. Right now, GE is seeking to find ways to recover its costs. A couple of weeks ago, GE terminated its contract with the City and demanded immediate payment. According to the Daily Press in Victorville:

Those terms allow GE to keep Victorville's $50 million deposit on the equipment, plus either demand a $108 million termination fee or take control of the Victorville 2 power plant.

The City has few options at this point, but the price tag GE demands could force the City into bankruptcy.

It is possible that the project could still be built if GE decides take control over it, but the stiff environmental conditions would still have to be met.

In addition to these woes, the City is under investigation by a grand jury for financial dealings and S&P has downgraded several City bonds to junk status.

This story about going green in California may be repeated elsewhere in the state under the burdensome California requirements. While Gov. Schwarzenegger restates his commitment to going green, the reality is that the State's regulatory climate discourages green energy.

The unions and the environmental groups purportedly support green projects, but they in fact, often oppose them for environmental reasons. And Senator Diane Feinstein (D-CA) recently expressed opposition to solar panels in the Mojave Desert which is ideally suited for solar power in the state.

The green energy projects were supposed to create jobs for California workers according to Schwarzenegger. However, while there were jobs created for this project, many of those jobs went to lawyers.

Without these green projects, California may eventually face more blackouts. If it happens, the blame will fall squarely on the green lobby which advocates out of both sides of their collective mouths. They say they want green energy, but they will not support green energy.

The Main Stream Media are also complicit since they have been silent about the Victorville fiasco and similar projects. The only news coverage is in the local newspaper and in trade journals.

When I see stuff like this all I can think of how exhausting this all is. I just say enough already. I am picturing this dumb stupid little broad in my mind. Where do they grow liberals like this I ask? ("thrifty chicks"?):

By Amy Hardin Turosak Amy Hardin Turosak – Thu Apr 30, 5:00 am ETDenver – Thanks to the Food and Drug Administration (FDA), I see that my serving of Honey Nut Cheerios has 110 calories. This, along with dozens of other data points on the box, helps me make educated choices to do right by my body. I'm ready to tackle the day as an informed consumer of food.

Wait! That box: What "ingredients" went into that? Ditto for the plastic liner and all those O's: How many "calories" did it take to manufacture them and then ship them to my table? What's the carbon footprint of my breakfast?

At the store, I can compare cereal carbohydrates but I can't compare how much they cost the planet. I'm not empowered to shop right by the health of the planet. I might as well put on a blindfold.

Americans need to broaden their understanding of energy and its cost. Nearly everything in our homes, from toasters to hair dryers, consumes energy (and emits pollution) from start to finish. But we don't think about that. We think that's the job of the energy companies. We turn down the thermostat and buy reusable bags at the grocery store, but that's about it.

Americans are voracious shoppers. We use more than our fair share of resources in this world. To embrace conservation, shouldn't we consider a product's carbon cost? Take appliances. Many come with an Energy Star rating. We all nod and feel good about it. But this label just shows the relative energy cost of ownership, not the absolute cost of manufacture. I wonder if it is confused with the car device OnStar; consumers may think washers have satellite connections offering emergency assistance for grass stains.

Think about all those products that companies dare to call "green." Unlike "organic," which is a federally regulated label, companies can affix "green" to just about anything, even petroleum-based plastic Easter eggs from China! Head slap. The manufacturers can't be trusted – they're colorblind. By "green," they must mean the color of money. Unless they start making edible sofas, this is beyond the FDA's scope, so who is going to settle this issue?

Misconceptions abound. Most runners don't think they have a negative environmental impact. The runner just runs, right? Hats off to Runner's World magazine for taking a hard look at this question in "The Runner's Footprint." The article showed that the carbon cost associated with a shoe's life cycle can be eye-popping. My husband is a runner. Runners don't like air pollution. So I know a shoe's carbon cost would weigh heavily on his choice.

If price and quality were equal, which widget would you buy – the one that cost 10,000 carbon points or 100? From jeans to washing machines, we need a common metric for the pollution costs that products incur during their life cycles. If we can list the nutritional value of a pickled egg, surely we can drive a healthier market and planet through system-cost comparison.

While we wait for that, we don't have to wait to be smarter shoppers. When we spend money on new products, we spend a great many carbon points. But when we buy repurposed goods at thrift stores, we spend close to zero carbon points. We have choices, but we need to be informed to make responsible ones.

Posted April 30th, 2009 at 5.24pm in Energy and Environment, Ongoing Priorities.

Policymakers in Washington want to dramatically change America’s energy policy by regulating carbon dioxide emissions. Their most popular idea, included in the Waxman-Markey 2009 energy bill, is a cap and trade proposal.

Many Americans find the debate in Washington over adopting a cap-and-trade program to reduce carbon dioxide a bit confusing. It works like this: Policymakers set a cap on the amount of carbon dioxide and other greenhouse gases that can be omitted into the atmosphere. Each power plant, factory, refinery, and other regulated entity will be allocated allowances (rights to emit) six greenhouse gases. However, only a certain percentage of the allowances will be allocated to these entities. The remaining percentage will be auctioned off or distributed to other emitting entities. Most emitters will need to purchase at least some allowances at auction. Emitters who reduce their emissions below their annual allotment can sell their excess allowances to those who do not–the trade part of cap-and-trade. Over time, the cap would be ratcheted down, requiring greater cuts in emissions

Put simply, it’s a tax on energy consumption. In fact, it would act as a huge tax. If enacted, cap-and-trade will be one of the government’s largest revenue sources within the next decade. Since 85 percent of our energy demand is met through fossil fuels, increasing the costs of energy will have significant economic consequences.

Most notably, the cost of producing goods for businesses increases, and consumer demand falls for two reasons; price hikes on goods reduce demand and people have less disposable income due to higher energy prices. And since low-income households spend a larger percentage of their income on energy, higher prices hit the poor much harder.From an economy-wide perspective, higher energy prices force businesses to make production cuts and reduce labor. Furthermore, as we see in the current recession, reduced consumer spending only exacerbates this. The overall result is increased unemployment and slow economic growth.

What about green jobs, the supposed solution to our economic woes and environmental concerns? Sure, we can use government (read: taxpayer) money to hire workers to build windmills and solar panels. There will be green job creation. But that’s only one side of the coin. Despite years of subsidies and special tax breaks, renewables provide only three percent of the nation’s energy generation. Even after taxpayer-funded subsidies, consumers must pay a premium on their energy bills for renewable energy. Consumers lose doubly, paying to fund these projects with tax dollars then paying for pricier electricity.

Circling back to the effects of higher energy prices on the economy, forcing costlier renewable energy makes the economic impact only worse. According to The Heritage Foundation’s Center for Data Analysis, job losses resulting from the Lieberman-Warner cap and trade would have surpassed 900,000 in some years. Keep in mind; this is net of any “green jobs” created. Also keep in mind; the Waxman-Markey bill is has stricter emission cut targets.

It’s also worth noting that jobs are good, but they are not the end all goal. A business could hire a person to dig a hole and fill it up for eight hours a day, but how much value is that creating for society. Most people would argue not much. The big problem is resources a firm (or the government) devotes to a project like this cannot be used elsewhere in a more productive manner. Not only could the labor be used elsewhere but the firm could have used its money on a more productive project – although if a business is hiring someone to dig and fill up a hole, they probably won’t be in business for long.

A cap-and-tax has a number of problems, which will be covered in a 10-part series of blog posts, but above all else, it’s a jobs killer.

Cap and Tax Will Force You to Make Budget Cuts: Part 2 in a 10-Part Series

Posted May 1st, 2009 at 3.00pm in Energy and Environment.

On April 20, President Obama called for $100 million in budget cuts after announcing spending increases of $4 trillion. Heritage Senior Policy Analyst Brian Riedl breaks it down nicely:

• It is 1/40,000 of the federal budget;• It is 1/7,830 the size of the recent “stimulus” bill;• It would close 1/1,845 of this year’s budget deficit;• It is the amount the federal government spends every 13 minutes; and• For a family earning $40,000 annually, it is the equivalent of cutting $1 from their family budget.

But if President Obama were to sign a cap and trade bill into law, he would have to call for familial budget cuts much greater than one dollar. (For a brief explanation of how cap and trade works, go here.) As recently acknowledged by a top White House official, a global warming tax could generate as much as $1.9 trillion in tax revenue over eight years, which amounts to a nearly $2,000 tax every year for every American household.* Add this up over the period of a few years and we’re talking about trillions of dollars in lost income for the entire U.S. economy.

The current recession is causing Americans to take a second look at their household budget. A cap and trade plan would make them look even harder.

*The Heritage Foundation’s Center for Data Analysis (CDA) calculations confirmed this. CDA took the CO2 allowance limits from the Lieberman-Warner cap and trade bill, which was more lax than the Waxman-Markey bill. CDA then multiplied the CO2 allowance for each year times our estimates for the allowance price for each year. The summation of these products for 8 years (2012-2019), divided by eight to get the average per year and divided that by the number of households (about 110-120 million households) gave us an average per household tax per year of nearly $2,000.

Global warming skeptics are quick to point out the exorbitant costs of global warming legislation because they are, well, exorbitant. The $1.9 trillion of tax revenue generated over eight years from a cap-and-trade bill would still be larger than the $1.5 trillion from NASA, the New Deal, and Hurricane Katrina. It amounts to a nearly $2,000 tax every year for every American household. Projected job losses that would have resulted from the Lieberman-Warner cap and trade would have surpassed 900,000 in some years.

But if it saves the planet, isn’t it all worth it? Some radical environmental alarmists believe saving the environment should come at any cost and capitalist greed and short-sightedness is superseding the preservation of the planet for future generations.

Herein lies the problem: When the benefits of a cap and trade are measured against the costs, the costs significantly outweigh the negligible benefits. We’ve highlighted the costs in the first two parts of this series (here and here). Let’s dissect the benefits.

Analysis by the architects of an endangerment finding that would circumvent Congressional legislation to regulate carbon dioxide, the Environmental Protection Agency, strongly suggests that a 60 percent reduction in carbon-dioxide emissions by 2050 will reduce global temperature by 0.1 to 0.2 degrees Celsius by 2095. The bottom line: The extraordinary perils of carbon dioxide regulation for the American economy come with little, if any, environmental benefit.

So radical environmentalists are willing to pay anything, and more importantly, coerce others to pay heavily to save the planet. But when the benefit is barely noticeable, even that argument falls flat on its face.

There are ways, however, to improve the environment in the U.S. and abroad without burdening the economy. It begins with establishing well-defined property rights. When property rights cease to exist, people do not have the proper incentives to devote their own resources to protect and improve their land. In this instance, whats referred to as the tragedy of the commons occurs. People are much more inclined to litter in a park than their own backyards. While this has environmental consequences of its own, the damage can occur on much larger levels. Overfishing, overgrazing, forest degradation are examples of overusing the earths resources when property rights are not clearly defined. Instead of continual lobbying Congress to meet their radical agenda, environmentalist groups could use their resources to purchase some of this land and improve it themselves.

Also worth noting is that doomsday scenarios, new and old, often play out much differently than what the doomsayers projected. Economist Walter Williams writes,

It’s not just latter-day doomsayers who have been wrong; doomsayers have always been wrong. In 1885, the U.S. Geological Survey announced there was “little or no chance” of oil being discovered in California, and a few years later they said the same about Kansas and Texas. In 1939, the U.S. Department of the Interior said American oil supplies would last only another 13 years. In 1949, the Secretary of the Interior said the end of U.S. oil supplies was in sight. Having learned nothing from its earlier erroneous claims, in 1974 the U.S. Geological Survey advised us that the U.S. had only a 10-year supply of natural gas. The fact of the matter, according to the American Gas Association, there’s a 1,000 to 2,500 year supply.

Here are my questions: In 1970, when environmentalists were making predictions of manmade global cooling and the threat of an ice age and millions of Americans starving to death, what kind of government policy should we have undertaken to prevent such a calamity? When Ehrlich predicted that England would not exist in the year 2000, what steps should the British Parliament have taken in 1970 to prevent such a dire outcome? In 1939, when the U.S. Department of the Interior warned that we only had oil supplies for another 13 years, what actions should President Roosevelt have taken? Finally, what makes us think that environmental alarmism is any more correct now that they have switched their tune to manmade global warming?

Consumers to benefit from savings achieved through increased awareness of energy use but householders likely to pick up some of the costs of the compulsory, nationwide scheme

Smart meters will work with real-time energy displays showing energy use around the home. Photograph: Energy Retailers Association/PA

Every home in the UK must be fitted with a "smart meter" by 2020 to reduce energy use and pave the way for a low-carbon "smart grid", under plans unveiled by the government today.

The new meters will send information on real-time electricity and gas use in households and small businesses direct to utility companies, eliminating the need for customers to stay at home for meter readings or to receive over-estimated bills. However, consumers are likely to pick up some of the costs of the compulsory, nationwide scheme.

The government estimates putting smart meters in the country's 26m homes could save customers and energy companies £2.5bn-£3.6bn over the next 20 years, but says it will cost more than double this to buy and install the equipment.

Launching a consultation on how the smart meters should be rolled out, the Department for Energy and Climate Change (DECC) claimed the scheme will be the biggest smart meter project in the world.

"The meters most of us have in our homes were designed for a different age, before climate change," said Ed Miliband, the energy and climate change secretary. "Now we need to get smarter with our energy ... so it's important we design a system that brings best value to everyone involved."

Energy companies welcomed the switch, which will reduce their running costs by making meter readers obsolete and eliminating the customer service time spent on dealing with estimated bills. Consumers and small business owners could benefit from savings achieved through increased awareness of their energy use. Previous studies have shown that smart meters encourage homeowners to cut their energy use by 3-15%, although experts warn that the technology requires consumer education and is not an "install and forget" energy-efficiency measure like loft insulation.

Consumer groups warned that homeowners should not have to shoulder heavy costs for the new meters. Replacing today's meters by the end of 2020 is expected to cost £8.11bn under the government's preferred plan, with utility companies paying upfront, but able to pass on the charge. "Bill-payers have been suffering for many years from ever-increasing bills, so I hope the cost of the scheme – up to £340 for every household – won't wholly be put at their feet," said Scott Byrom, utilities manager at Moneysupermarket.com.

The Energy Retail Association – which represents the major electricity and gas companies – said that smart meters will be "cost-neutral" to customers because the savings to its members will part-fund the roll out.

Smart meters will also play a key role in helping the government meet its greenhouse gas reduction targets of at least 34% by 2020. The meters make it easier for householders to sell power they generate through wind and solar back to the grid. They will also allow suppliers to smooth the peaks and troughs of UK electricity demand by offering cheaper electricity at times of low demand, and increasing the price when demand is high. Reducing peak demand means fewer power stations need to be on standby, thereby cutting carbon emissions.

Ultimately, smart meters will allow the electricity used by domestic appliances to be "dynamically" managed. This would mean switching off refrigerators for a few minutes at times of high demand, or using plugged-in electric vehicles to store power. This flexibility is crucial if a significant amount of clean, renewable energy is to be supplied from harnessing the sun, wind and waves, all of which vary with the weather. A government report last year suggested such "demand management" technology could save 2m tonnes of CO2 a year.

Environmental campaigners and opposition politicians warned that the 2020 timetable was not fast enough. The shadow energy and climate change secretary, Greg Clark, said: "In other countries around the world, smart meters are being rolled out now. Ten years [to install] a technology that's already available seems very leisurely considering the urgency of climate change." However, consultants Ernst & Young noted that even fitting 2.6m homes with meters every until 2020 was "challenging".

Three plans are under consideration for the natiowide roll-out of smart meters. The first sees utilities take on all responsibilities, including supply and installation, plus the data management. The second – the government's preferred model – has energy suppliers responsible for the meters, but with a new third party body handling the energy data. A third scenario envisages setting up a new organisation to oversee both the meters and data management.

Smart meter trials are already under way around the country through energy companies including British Gas and Npower, and smaller suppliers such as First Utility already supply smart meters as standard. The first smart meters installed under the government's new plans are expected to arrive in 2012.

By DINA CAPPIELLO, Associated Press Writer6 mins agoWASHINGTON – An Environmental Protection Agency proposal that could lead to regulating the gases blamed for global warming will prove costly for factories, small businesses and other institutions, according to a White House document.The nine-page memo, released Tuesday by Republican senators, is a compilation of opinions made by numerous federal agencies prior to the EPA determining in April that greenhouse gases pose dangers to public health and welfare.That finding set in motion the regulation of six heat-trapping gases from cars and trucks, factories and other sources under the Clean Air Act for the first time.The document, which is labeled "Deliberative-Attorney Client Privilege," says that if the EPA proceeds with the regulation of heat-trapping gases, including carbon dioxide, factories, small businesses and institutions would be subject to costly regulation."Making the decision to regulate carbon dioxide ... for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities," the document reads.Republicans and business groups immediately used the document to bolster their arguments that controlling greenhouse gases would harm the economy.They also highlighted parts of the document that find fault with how the EPA arrived at its conclusion that greenhouse gases endanger human health and welfare, since the gases by themselves do not pose any harm.The memo says the EPA could have been "more balanced" in its analysis by also highlighting regions of the country that would benefit from global warming, such as Alaska, which would have warmer winters."It really appears to me that the decision was based more on political calculation than on scientific ones," said Sen. John Barrasso, R-Wyo., who called the document "a smoking gun" during a hearing Tuesday on the Obama administration's proposed budget for EPA."The counsel in this administration repeatedly questions the lack of scientific support that you have for this proposed finding," he said.EPA administrator Lisa Jackson responded by saying that the finding by the EPA in April was required by law, stemming from a 2007 Supreme Court decision that said the EPA could classify greenhouse gases as pollutants. Jackson also said the agency's determination was preliminary and would not necessarily result in regulation.The administration has said it prefers a new law that would limit greenhouse gases and put a price on climate-altering pollution."I have said over and over, as has the president, that we do understand that there are costs to the economy of addressing global warming emissions, and that the best way to address them is through a gradual move to a market-based program like cap and trade," Jackson said.

It's only a matter of time before President Barack Obama's vast popularity runs aground on his energy policies. In the name of saving the planet from global warming, he has delayed new oil drilling, an action that will have major political repercussions once the world economy recovers. Instead of using some the stimulus billions to produce more gas and oil, Obama's wild-eyed supporters dream of "renewable" energy derived from corn, wind, sunshine, and even grass.

With the appointment of extremists like climate czar Carol Browner and science adviser John Holdren, Obama has placed his administration's environmental policy in the hands of radicals. Interior Secretary Ken Salazar proposes replacing oil and coal with windmills. Yet Barron's recently reported that America would need to build 500,000 giant offshore windmills and transmission lines to produce Salazar's specified 1,900 gigawatts of electricity. In contrast, oil and gas drilling could provide hundreds of thousands of solid, well-paying blue-collar jobs. Washington Post economics columnist Robert Samuelson explains this in "The Bias Against Oil & Gas," describing how alternative energy job creation is miniscule compared to what an expansion of oil production would create. Meanwhile, Rep. Henry Waxman (D-Calif.) and Rep. Edward Markey (D-Mass.) have proposed legislation giving legal standing to allow Americans to sue any company that produces "greenhouse" gasses.

All of these things are happening at a time when natural gas is abundant and cheap. The new technology of horizontal fraccing has made it economically feasible to drill into vast shale deposits in many states, even famously difficult ones like Michigan and New York. Many cars could run on natural gas, much like many buses do already. On a recent trip to Peru, I learned that most taxicabs have been converted to natural gas for a cost of about $1,000 each. New technologies continually revive old oil and gas fields and make new ones economically viable. So it's little more than socialist Malthusianism to argue that the world is running out of cheap energy. Science will always find and harness new sources. Even the liberal New Republic recently admitted that, "Utopian environmentalism has, to some extent, always promised to heal the alienation wrought by modernity... it is a form of escapism and disengagement from reality." The extremists scoff at science and would apparently prefer scarcity so that bureaucratic rationing will enforce a change in American lifestyles.

Instead of producing more of the cheap, abundant energy that fueled America's dynamic growth, the extremists who support and surround Obama dream of drastically cutting American consumption. Many of them would like to see the government force General Motors to make flimsy little cars that run on electricity (or alternative energy) at the cost of billions. Meanwhile, the Sierra Club magazine recently boasted of helping to block construction of 96 coal-fired power plants and helping to impose a de facto moratorium on all new plants.

Currently, half of the drilling rigs in America are shutdown because of low oil and gas prices. Most smaller oil companies have suffered severe damage or even gone bankrupt by their inability to renew loans or gain credit. Likewise, the majors have few safe options in foreign countries but would invest heavily in offshore American exploration, if it were permitted.

So what about the so-called green alternatives? Forbes recently detailed the problems with windmills. First, they depend upon a two-cent-per-kilowatt taxpayer subsidy to remain competitive. They also require backup gas generators (in case the wind isn't blowing when needed) and new transmission lines running from windy places to population centers. And while new technologies to store wind-generated electricity are in the works, they have so far proven uneconomical. Nor does this even begin to consider the years of legal delays that would likely result from litigious neighbors opposed to new transmission towers. Solar power is even more expensive and would also require additional billions for backup generators and new transmission lines. Compare those unseen costs to the clear benefits of coal and gas plants where transmission lines are already built.

New oil and gas technologies could also help the U.S. from importing so much oil. But the Obama administration is stalling and trying to stop the offshore drilling approved by the previous Congress. The White House has also shut down previously permitted onshore drilling and burdened drillers with costly new restrictions. Meanwhile, $80 billion in stimulus spending has been earmarked for "renewable" energy. The plan is to give a 30 percent tax credit for the associated costs.

Americans will soon again feel the sting of gasoline costing $3.00 or $4.00 per gallon and then come to recognize how we've wasted years of opportunity to produce more energy domestically. For instance, the U.S. Geological Survey estimates that there are 85 billion barrels of offshore oil. (And that is an old number. It is almost certain to increase once new exploration and testing are permitted.) New supplies in continental America, not to mention the billions of barrels now accessible in Alaska, could transform our trade deficit by cutting hundreds of billions of dollars in imports. This would help rescue the value of the dollar, alleviate the cost of maintaining armies and navies in the Middle East, and help save free trade from the latest round of restrictions.

It's also essential to remember that so-called renewable energy cannot replace oil and natural gas in any significant way. For example, corn-based ethanol production "costs" nearly as much to produce as it saves in oil and can only exist with the help of costly and unending subsidies. Government, in other words, gets what it pays for. If it offers subsidies to alleviate global warming or make gasoline from grass, it will find promoters who will gladly accept that money and deliver scant results.

With the Republicans no longer handicapped by leaders like George W. Bush and John McCain, both of who caved before environmental extremists, Obama's energy policies might be a strong issue for conservatives and libertarians to rally around, and perhaps change their political fortunes. Remember that McCain famously opposed drilling in ANWR, while Bush promised the country that a gasoline substitute could be produced from switch grass.

One day the alternative energy fiasco will be studied as a vast example of waste and fraud that contributed to the collapse of the dollar and to lower living standards for most Americans. Let's hope that day comes sooner rather than later.

Jon Basil Utley is associate publisher of The American Conservative. He is a former insurance executive with AIG and a former South American correspondent for Knight Ridder.Discuss this article online.

It has become one of the staples of modern, hi-tech life: using satellite navigation tools built into your car or mobile phone to find your way from A to B. But experts have warned that the system may be close to breakdown.

US government officials are concerned that the quality of the Global Positioning System (GPS) could begin to deteriorate as early as next year, resulting in regular blackouts and failures – or even dishing out inaccurate directions to millions of people worldwide.

The warning centres on the network of GPS satellites that constantly orbit the planet and beam signals back to the ground that help pinpoint your position on the Earth's surface.

The satellites are overseen by the US Air Force, which has maintained the GPS network since the early 1990s. According to a study by the US government accountability office (GAO), mismanagement and a lack of investment means that some of the crucial GPS satellites could begin to fail as early as next year.

"It is uncertain whether the Air Force will be able to acquire new satellites in time to maintain current GPS service without interruption," said the report, presented to Congress. "If not, some military operations and some civilian users could be adversely affected."

The report says that Air Force officials have failed to execute the necessary steps to keep the system running smoothly.

Although it is currently spending nearly $2bn (£1.3bn) to bring the 20-year-old system up to date, the GAO – which is the equivalent of Britain's National Audit Office – says that delays and overspending are putting the entire system in jeopardy.

"In recent years, the Air Force has struggled to successfully build GPS satellites within cost and schedule goals," said the report. "It encountered significant technical problems … [and] struggled with a different contractor."

The first replacement GPS satellite was due to launch at the beginning of 2007, but has been delayed several times and is now scheduled to go into orbit in November this year – almost three years late.

The impact on ordinary users could be significant, with millions of satnav users potential victims of bad directions or failed services. There would also be similar side effects on the military, which uses GPS for mapping, reconnaissance and for tracking hostile targets.

Some suggest that it could also have an impact on the proliferation of so-called location applications on mobile handsets – just as applications on the iPhone and other GPS-enabled smartphones are starting to get more popular.

Tom Coates, the head of Yahoo's Fire Eagle system – which lets users share their location data from their mobile – said he was sceptical that US officials would let the system fall into total disrepair because it was important to so many people and companies.

"I'd be surprised if anyone in the US government was actually OK with letting it fail – it's too useful," he told the Guardian.

"It sounds like something that could be very serious in a whole range of areas if it were to actually happen. It probably wouldn't damage many locative services applications now, but potentially it would retard their development and mainstreaming if it were to come to pass."

The failings of GPS could also play into the hands of other countries – including opening the door to Galileo, the European-funded attempt to rival America's satellite navigation system, which is scheduled to start rolling out later next year.

Russia, India and China have developed their own satellite navigation technologies that are currently being expanded.

The Next Oil ShockBy INVESTOR'S BUSINESS DAILY | Posted Friday, May 22, 2009 4:20 PM PTEnergy Policy: A top expert tells Congress that oil will be around for a long time and high inventories and low prices are no excuse not to find more. Oil shock? How about a no-oil shock?Read More: Energy

Be careful what you wish for, goes the old proverb. Well, as we all had hoped, energy prices have fallen — but only as part of the global decline in economic activity. This has been used as an excuse to further discourage exploration for and development of domestic oil resources. But if the economy does recover, that policy could provoke another recession.Daniel Yergin, chairman of HIS-CERA, testified before the Joint Economic Committee of Congress last week that we have already experienced a "demand shock" with very high prices driven by rising global demand led by the economies of China and India.We've also experienced what he calls a "recession shock" with flat or falling demand and low prices. But there might be another "long aftershock" in our future with high demand returning with a vengeance along with a global economic recovery, leaving those who buried their heads in the oil sands in the economic lurch.The current recession has wiped out demand growth for the last four years. Oil prices have tumbled $100 a barrel or more from their high point. Spare production capacity is expected to be 6.5 million barrels per day through 2009. Anticipating a robust future, other countries such as China and Brazil have continued to look for oil while we continue to research . . . switch grass.Interestingly, as Yergin notes, current spare capacity is equal to the combined total output of Iran and Venezuela — or the combined exports of Iran, Venezuela and Nigeria.These are three of the most unstable nations on the earth, and two of them are implacably hostile to the U.S. This does not bode well for our economic and energy security.While low prices and excess capacity sound good, they could vanish like the morning dew. The long lead times, up to a decade for a new field, needed to expand capacity and replenish supplies should compel us to drill like there's no tomorrow — for there might not be.Oil will continue to be a big player in our energy mix no matter how many windmills we tilt at or how many clown cars we place in front of 18-wheelers on our interstates."Today," Yergin notes, "fossil fuels — oil, natural gas, and coal — supply over 80% of our total energy. Oil by itself is about 40%. That alone makes clear the importance of oil — and the evolution of the oil market — to our economy and security in the decade ahead."America's oil and natural gas energy needs will grow. A study by ICF International, commissioned by the American Petroleum Institute, finds that our domestic energy resources placed off limits by Congress in ANWR, in Rocky Mountain shale and in the Outer Continental Shelf could generate more than $1.7 trillion in government revenue and create thousands of new jobs.The irony is that in North America we have enough oil to ensure our energy and economic security. The U.S. and Canada together hold 15% of the world's proven reserves, and that's not even including the potential of American oil shale and Canadian oil sands — which are massive.The current decline in demand has also sparked a decline in investment and added further justification for its deliberate policy of thwarting any expansion in domestic supply."As the economy picks up, spare capacity will start to erode, and the oil market could tighten again in the first half of the next decade," Yergin said. "The result could be another adverse shock to the U.S. economy and global energy security."The result could be another recession where we drive to the unemployment office in our government-designed clown cars.

Two federal studies add up the corn fuel's exorbitant cost.The Obama Administration is pushing a big expansion in ethanol, including a mandate to increase the share of the corn-based fuel required in gasoline to 15% from 10%. Apparently no one in the Administration has read a pair of new studies, one from its own EPA, that expose ethanol as a bad deal for consumers with little environmental benefit.

The biofuels industry already receives a 45 cent tax credit for every gallon of ethanol produced, or about $3 billion a year. Meanwhile, import tariffs of 54 cents a gallon and an ad valorem tariff of four to seven cents a gallon keep out sugar-based ethanol from Brazil and the Caribbean. The federal 10% blending requirement insures a market for ethanol whether consumers want it or not -- a market Congress has mandated will double to 20.5 billion gallons in 2015.

The Congressional Budget Office reported last month that Americans pay another surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices." Ethanol raises food prices because millions of acres of farmland and three billion bushels of corn were diverted to ethanol from food production. Americans spend about $1.1 trillion a year on food, so in 2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in higher grocery bills.

A second study -- by the Environmental Protection Agency's Office of Transportation and Air Quality -- explains that the reduction in CO2 emissions from burning ethanol are minimal and maybe negative. Making ethanol requires new land from clearing forest and grasslands that would otherwise sequester carbon emissions. "As with petroleum based fuels," the report concludes: "GHG [greenhouse gas] emissions are associated with the conversion and combustion of bio-fuels and every year they are produced GHG emissions could be released through time if new acres are needed to produce corn or other crops for biofuels."

The EPA study also explores a series of alternative scenarios over 30 to 100 years. In some cases ethanol leads to a net reduction in carbon relative to using gasoline. But many other long-term scenarios observe a net increase in CO2 relative to burning fossil fuels. Ethanol produced in a "basic natural gas fired dry mill" will over a 30-year horizon produce "a 5% increase in GHG emissions compared to petroleum gasoline." When ethanol is produced with coal burning mills, the process "significantly worsens the lifecycle GHG impact of ethanol" creating 34% more greenhouse gases than gasoline does over 30 years.

Both CBO and EPA find that in theory cellulosic ethanol -- from wood chips, grasses and biowaste -- would reduce carbon emissions. However, as CBO emphasizes, "current technologies for producing cellulosic ethanol are not commercially viable." The ethanol lobby is attempting a giant bait-and-switch: Keep claiming that cellulosic ethanol is just around the corner, even as it knows the only current technology to meet federal mandates is corn ethanol (or sugar, if it didn't face an import tariff).

As public policy, ethanol is like the joke about the baseball prospect who is a poor hitter but a bad fielder. It doesn't reduce CO2 but it does cost more. Imagine how many subsidies the Beltway would throw at ethanol if the fuel actually had any benefits.

I've heard it said that the reason the tax code is so complicated is so that lawmakers can bury favors deep in its bowels with impunity. Starting to look like cap and trade will go a similar route.

Energy Price Deceit

Congress tries to hide its cap-and-trade energy price increases

Ronald Bailey | June 2, 2009

Last month, leading Congressional climateer, Rep. Henry Waxman (D-Calif.), chair of the House Energy and Commerce Committee, pushed out a sweeping 1000-page bill that aims to dramatically reshape how Americans will use energy in the 21st century. At the heart of the American Clean Technology and Security (ACES) Act is a cap-and-trade proposal for limiting the emissions of carbon dioxide by American industry and consumers. Carbon dioxide, produced by burning fossil fuels and chopping down forests, is building up in the atmosphere where it is thought be the chief cause of man-made global warming.

The ACES Act would establish an artificial carbon market by setting a limit on the amount of greenhouse gases that can be emitted each year. Beginning in 2012, a national cap—or total maximum CO2 emissions—would be set and then ratcheted downward annually. Under ACES, the U.S. would emit 17 percent less carbon dioxide in 2020 than it did in 2005, eventually falling to 83 percent less than emitted in 2005 by 2050.

Electric and gas utilities, cement plants, steel foundries, and other companies would be required to have one emissions permit for every ton of CO2 discharged from their smoke stacks. Under a cap-and-trade scheme, emissions permits can be allocated and/or auctioned up to the set cap. Once allocated, the market allows companies emitting less than their quota to sell their excess permits to emitters needing to buy extra to meet their cap. This process sets a price on each ton of carbon dioxide.

The central fact of the cap-and-trade proposal is that it will increase the price of energy. If energy prices don't go up, the goal of getting energy producers, manufacturers, and consumers to shift away from carbon generating fuels (coal, oil, and natural gas) toward low-carbon sources of energy (nuclear, solar, wind, conservation) will not be achieved.

Whatever else they are, the folks in Congress are not stupid when comes to protecting their electoral viability. They are painfully aware of the fact that, while Americans express support for regulations to reduce greenhouse gases, 77 percent in a recent ABC News/Washington Post poll declared themselves either "very concerned" or "concerned" that "federal regulation of greenhouse gases could substantially raise the price of things you have to pay for."

So in an attempt to ward off voter displeasure over higher energy prices brought about by Congressionally-mandated carbon rationing, the denizens on Capitol Hill have tacked on a number of Rube Goldbergesque policy obfuscations designed the mask the price increases. These include subsidies and tax breaks for retrofitting buildings to use less energy, setting energy conservation appliance standards, subsidies for higher mileage automobiles, and imposing a renewable fuel standard on utility companies, among many other things.

The chief technique that Congress is using to hide the mandated price increase in electricity and natural gas from voters is giving away free emissions permits to local electricity and gas distribution companies. In the ACES bill, some 30 percent of emissions permits are allocated free to local distribution companies who are supposed to sell the permits and then pass along the money to consumers as a lump sum rebate to offset their higher utility bills. Why a lump sum?

As Harvard University environmental economist Robert Stavins explains in his article on "The Wonderful Politics of Cap-and-Trade," the hope is that such rebates will compensate "consumers for increases in electricity prices, but without reducing incentives for energy conservation." Even if they are getting a rebate, higher monthly electric bills will still likely annoy voters. But let's assume that this scheme actually works as intended and blunts household displeasure about paying more for electricity and natural gas.

There's one big problem: The proposal merely shifts the price paid by consumers for energy from local utilities to other products and services. For example, Resources for the Future economists Rich Sweeney and Dallas Burtraw calculate that auctioning all of the carbon emissions permits would result in a price of $20.91 per metric ton. However, allocating 30 percent of the carbon dioxide emissions permits free to local utilities as proposed under the ACES bill would mean lower electricity prices, and lower prices would mean more consumption. The result is that there would 24 percent fewer emissions reductions in the electricity sector than would have been the case had all permits been auctioned.

The higher emissions in the electricity sector make it harder for other sectors of the economy—automobiles, construction, steel, cement, food processing, retail, agriculture—to stay below the national cap on carbon dioxide emissions. And this pushes up the demand for the remaining permits, which boosts their prices. Sweeney and Burtraw calculate that the requirement for increased emissions reductions in other sectors under a national cap would raise the allowance price to $26.90 per metric ton. The result, according to Sweeney and Burtraw, is that "this raises the costs of goods and services from these sectors."

So this plan to allocate "free" permits could well end up costing consumers even more than they "save" on their household electricity and natural gas bills. Fearing the electoral consequences of honesty, Congress is trying to hide the fact that they are increasing energy prices by distracting the American people with a torrent of rebates, subsidies, and tax incentives, along with plenty of happy talk about renewable energy and creating "green jobs." The result is that Congress has devised a complicated and inefficient scheme where distributing a "free" commodity actually makes products and services more expensive than it would otherwise have to be. That's truly "wonderful politics"!

Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

Thomas D'Agostino head of the National Nuclear Security Administration, told a Senate hearing Wednesday the sites on the list are of civilian facilities and that none of the information is classified. Still, he said he's concerned the list could provide an "easy locator" for uranium storage sites and other facilities related to the country's civilian nuclear program.

The 266-page document was accidentally put on the Government Printing Office Web site. It is information that is to be provided as part of an international nuclear inspection program.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) — The government accidentally posted on the Internet a list of government and civilian nuclear facilities and their activities in the United States, but U.S. officials said Wednesday the posting included no information that compromised national security.

However, Energy Secretary Steven Chu, questioned about the disclosure at a House hearing, expressed concern with respect to a uranium storage facility at the department's Y-12 facility in Oak Ridge, Tenn. The facility holds large quantities of highly enriched uranium, which if obtained can be used to fashion a nuclear weapon.

"That's of great concern," said Chu, referring to the Y-12 site. "We will be looking hard and making sure physical security of those sites (at Y-12) is sufficient to prevent eco-terrorists and others getting hold of that material."

But later Chu told reporters that while the disclosure may be embarrassing "there's no secret classified information that's been compromised (and) the sites and everything are public knowledge" already available elsewhere.

But, he added, the list "gathers it up" in a single document, and that is of some concern.

The 266-page document was published on May 6 as a transmission from President Barack Obama to Congress. According to the document, the list was required by law and will be provided to the International Atomic Energy Agency.

Some of the pages are marked "highly confidential safeguards sensitive."

Chu said he had no details as to how the document was released, beyond that it involved the government printing office. "Someone made a mistake," said Chu, appearing before a House Appropriations subcommittee .

Damien LaVera, a spokesman for the National Nuclear Security Administration, said the document had been reviewed by a number of U.S. agencies and that disclosure of the information did not jeopardize national security. He said the document is part of an agreement on nuclear material inspection under the IAEA's nuclear nonproliferation effort.

"While we would have preferred it not be released, the Departments of Energy, Defense, and Commerce and the NRC all thoroughly reviewed it to ensure that no information of direct national security significance would be compromised," LaVera said in a statement.

An Energy Department official, who spoke on condition of anonymity because the official was not authorized to discuss the situation publicly, said none of the sites on the list are directly part of the government's nuclear weapons infrastructure.

In addition tothe Y-12 facility, the document includes some facilities at the Energy Department's Hanford nuclear site in Washington state and various civilian nuclear fuel processing sites including uranium enrichment facilitates, according to government officials.

Uranium stored at the Y-12 site is scheduled to be moved into a new $549 million high-security warehouse in 2010, said Y-12 spokesman Steve Wyatt. The 300-by-475-foot, fortress-like warehouse, under construction since 2004, will replace several aging vault-like storage facilities.

Beth Hayden, a spokeswoman for the Nuclear Regulatory Commission, said the agency reviewed the document as it relates to civilian facilities with NRC licenses and "we are confident that information of direct national security significance was not compromised."

The NRC has jurisdiction over commercial nuclear power plants and civilian uranium processing and storage facilities.

The publication of the list was first reported in an online secrecy newsletter Monday. The document had been posted on the Government Printing Office Web site, but has since been removed from that site.

In a statement, the Government Printing Office said Wednesday: "Upon being informed about potential sensitive nature of the attachment in this document, the Public Printer of the United States removed it from GPO's Web site pending further review. After consulting with the White House and Congress, it was determined that the document, including sensitive attachment, should be permanently removed from the Web site."

The GPO said it processes and produces approximately 160 House documents during the two-year congressional cycle, and the list was received by the agency in the normal process and produced under routine operating procedures.

The document includes both government and civilian nuclear facilities, all of which have various levels of security, including details and location of nation's 103 commercial nuclear power reactors, information readily available from various sources.

The document details the location of the nuclear sites and what is being done there.

For instance, there are nuclear reactors at the Westinghouse Electric Company in Pittsburgh, Pa. This facility is currently working on research into what happens when there are accidents with the nuclear reactors. The project started in 2006 and is expected to end in 2012, according to the document.

BOYO

PS these guys want to run healthcare and keep our records private Yeah right

Al Gore invests millions to make billions in cap-and-trade softwareJune 2, 2009 Al Gore’s venture capital firm has invested $6 million in a software company that stands to make billions of dollars from cap-and-trade regulation — further fueling controversy that Gore lied about his profiteering from cap-and-trade to Rep. Marsha Blackburn (R-TN) and the House Energy and Environment Subcommittee during testimony in April.

Hara Software sells software to help track greenhouse gas emissions. The market for such software is now about $2.5 billion dollars in size, and is expected to grow by a factor of ten to $25 billion if cap-and-trade legislation is enacted, according to Hara CEO Amit Chatterjee.

Kleiner Perkins, a venture capital firm in which Al Gore is a partner, invested in Hara just last year. Chatterjee told Reuters that,

“This company would not have existed if Al Gore had not bought off on the idea.”

Gore is also under fire for lying to Rep. Steve Scalise (R-LA) at the same congressional hearing about his relationship with Goldman Sachs.

Operating as a stealth tax, cap-and-trade will make the vast majority of Americans poorer and less free — but Al Gore, Kleiner Perkins, Amit Chatterjee and Hara will be laughing all the way to the bank.